The Connection Between Losing Health Insurance and Bankruptcy
Market Watch has summarized the findings of a new study that analyzed Bureau of Labor Statistics data for over 12,500 people. The researchers found a strong link that should not be surprising to readers of our blog. In particular, they found that losing medical coverage, even briefly, increased the odds of filing for bankruptcy. In fact, the odds of filing for bankruptcy doubled after the loss of health insurance.
In many ways, a medical emergency such as a heart attack, stroke, or cancer diagnosis is akin to a natural disaster like a hurricane or a tornado. People with health insurance will at least have some of their care paid for by their insurer. With medical bills often topping more than $100,000, even skimpy health insurance can absorb much of the financial shock, allowing the sick to cover their other expenses.
However, lacking health insurance means that a person will be fully responsible for paying all medical bills, which is beyond the means of most people. The uninsured could struggle to pay for even moderately priced care, such as surgery to set a broken bone or skin grafts after a bad burn.
Researchers found that there was a connection between coverage interruption and bankruptcy even when controlling for income and debt.
Risk Factors for Losing Insurance
Almost anyone can lose health insurance, especially if they are laid off from a job. But other life events can increase the odds that there is an interruption in coverage. Market Watch recognized some of them, but a big one is divorce.
If you receive health insurance from your spouse’s employer, then any divorce can suddenly lead to a loss of coverage. COBRA might be an option, but often the premiums are too expensive. Unless you find a job rapidly, you will need to either buy individual coverage or go without—which increases the chances of suffering a serious financial setback.
Getting the Health Insurance Coverage You Need
Finding affordable coverage is certainly a challenge, but you do have options. One is to check whether you can buy coverage on the Obamacare exchanges. This insurance has unfortunately received unfair negative coverage. If your income is less than 400% of the poverty rate, you can qualify for a subsidy to help pay for your premiums. People with even lower incomes might qualify for help paying their deductible, also.
Unfortunately, Florida chose not to expand access to Medicaid for low-income people. Currently, only a limited number of people can sign up for the program. As part of the passage of the Affordable Care Act, states had the choice to expand access to Medicaid. Thus far, Florida has chosen not to, though that could change in the future.
Get the Legal Help You Need
Bankruptcy is usually a last resort after all attempts to keep current on debt have failed. Fortunately, the law is clear when you can apply and what debts you can wipe out. If you want to learn more, please contact the Plantation bankruptcy attorneys at Nowack & Olson today. We have provided compassionate guidance to those in Plantation for many years. Call today at 888-813-4737 to schedule a free consultation.