In describing the need for health care reform, President Obama noted the importance of insuring the middle class against financial catastrophe. When he addressed a joint session of Congress in September, he described the need to protect Americans "who live every day just one accident or illness away from bankruptcy."
A recent New York Times article describes how health care reform would improve the problem. The proposed bills in the House and Senate would expand Medicare eligibility and provide health insurance subsidies for those making up to four times the federal poverty level, which in 2009 was $22,050 for a family of four. The bills would prohibit insurers from denying coverage to those with pre-existing health conditions and would cap annual out-of-pocket medical costs.
As health reform has remained in the national consciousness, there is a growing awareness of just how big a role medical expenses play in the over one million bankruptcies filed by individuals and families every year. As one bankruptcy attorney described it, bankruptcy has become the insurance system for the country. A growing number of Chapter 7 liquidation cases discharge significant medical debt. For many middle class families who already have plenty of financial pressures, dealing with unanticipated medical expenses can prove to be overwhelming.
And medical debt is not limited to the uninsured. With deductibles in the thousands or policies that only cover a percentage of the cost, many insured are forced into bankruptcy by expensive and necessary medical procedures.
Hopefully, health care reform will be able to reverse the trend of medical bankruptcies. Until Congress passes reform, contact a bankruptcy attorney if you need some advice on how to deal with medical debt that has upset your finances.
