The healthcare debate and bankruptcy

Medical debt is the second most common reason for filing bankruptcy in America today. One might think that, given the extensive health care debate in our country, the connection between spiraling health costs and bankruptcy filings would be made an issue. Instead, the debate just rambles on about complex forms, confusing co-pays and generic prescription drug replacements.

There is no definitive cure for the ills of America's medical plan drama. In fact, despite all the campaign promises, the new administration's universal health care plan has not even begun to find its legs. To the administration's credit, there are a number of legislative efforts underway that will come to the aid of a lot of debt-addled Americans. The Senate is currently discussing three options and according to the associated press, they go something like this:

• Create a plan that resembles Medicare, administered by the Health and Human Services department.
• Adopt a Medicare-like plan, but pick an outside party to run it. That way government officials would not directly control the day-to-day operations.
• Leave it up to individual states to set up a public insurance plan for their residents.

The problems with health care run deep. Global Health Maintenance Organizations (HMO) and the closely related Preferred Provider Organizations try to solve the problem by encouraging preventative care and taking a more hands on approach in treatment, so patients better understand how to keep themselves healthy and in the end, keep medical costs under control. But even their definition of "affordable" varies quite a bit from how the most of us define "monthly income."

For the uninsured, the dollars spent on medical issues can be staggering. It is not uncommon to see many working class people get saddled with a bill for a single medical visit that can be more than an entire month's paycheck. For many of us, it's easy to complain about public hand-outs and out of control welfare benefits that offer medical care at the expense of the taxpayer. Sure, many of our fellow Americans do need assistance in that regard and yes, it can be abused. However, you can't get a kidney transplant at a walk-in clinic. Or stop in for a dose of chemo.

For every one person that may be getting some flu meds or an arm cast on the tax-payer's dime, there are twice as many going untreated for serious ailments because they can't afford it. Their problems only become more serious when they resort to a credit card or home equity line or whatever small amount of retirement savings they have to pay for that treatment. A few months later when the bills arrive and all the deferments and payment plan options have been exhausted, there is usually only one alternative: bankruptcy. And while that bankruptcy might very well nurse them back to financial health, it won't necessarily keep them physically healthy. So the cycle continues.

A person can change their spending habits and learn to be more financially responsible. A person can also change their diet and exercise to stay healthy. But medical emergencies happen and try as we might, we can't always learn how to be more frugal when it comes to getting cancer or less impulsive about paralysis. Medical expenses, like the ailments that create them, can be terribly crippling to our health, and our credit. Serving North Carolina residents, John T. Orcutt has helped thousands of families get out from under medical debt. Call our offices today for your free initial consultation at convenient locations in Raleigh, Durham, Fayetteville and Wilson.