Medical expenses are often due to unexpected accidents or illnesses. As any New Jersey resident who has experienced a sudden illness or injury can attest, the costs quickly run into the thousands of dollars and higher -- even with medical insurance. By 2013, the rising costs of health care resulted in medical debt being the number one reason why people are filing for bankruptcy.
In 2014, nearly 64 million people in the United States were burdened with medical bills they struggled to pay -- if they could pay at all. Even though some people are optimistic that this number is down approximately 10 million from 2012, the reasons the number dropped are unclear. As experts sift through the relevant data, insurance deductibles continue to rise, which could send the number of those owing thousands of dollars out-of-pocket to rise above past numbers.
Insurance plans available through the Affordable Care Act still come with high deductibles -- especially if Americans are unable to afford a better plan. For instance, the lowest cost options -- bronze plans -- often come with a deductible of $3,500. This means that consumers who become ill or injured will have to spend at least $3,500 before they see any cost savings. Further, additional out-of-pocket expenses could still rise even with insurance. Bills can go even higher if a person fails to stay "in-network" when receiving medical care, and the number of health care providers that are in-network is often small.
For New Jersey residents who fall into the number of people overwhelmed by medical debt, filing for bankruptcy could help. After dealing with an injury or illness, facing thousands of dollars in medical costs will most likely not hasten recovery. Being relieved of the burden of medical bills through bankruptcy could give consumers the chance to start over financially with a clean slate.
Source: USA Today, "Consumers still struggling with medical debt", Shefali Luthra, Feb. 1, 2015