Whether Employed or Not, How Health Care Costs Can Be Hazardous to Your Budget Skip to main content

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Whether Employed or Not, How Health Care Costs Can Be Hazardous to Your Budget


For jobless Americans—forced from their careers during an era of economic uncertainty (and in an environment of staggering unemployment rates)—the lingering financial malaise has proven to be more than just a little bit hazardous to their health.

As it turns out, nine million laid-off Americans lost all health insurance in last two years.

In fact, according to a new study from the Commonwealth Fund, a private proponent of health care reform, 57 percent of Americans who lost a job that provided them health insurance could not afford to regain that health care coverage post-layoff.

What’s worse is that the same report found that some 19 million Americans who tried to purchase a health plan on their own in the insurance marketplace between 2007 and 2010 were either rejected due to the dreaded “pre-existing condition” excuse or were simply unable to find affordable coverage that fit their health care needs.

The authors of the report found that approximately 52 million Americans had no health coverage in 2010, compared to about 38 million in 2001. In addition, when Americans were able to spend on medical costs, they spent more: some 49 million adults spent 10 percent or more of their income on out-of-pocket health care costs and premiums in 2010, up from roughly 31 million in 2001.

According to the Commonwealth Fund report, "This means that already stretched family budgets are vulnerable to catastrophic losses and bankruptcy in the event of a serious accident or illness, and that families face significant financial barriers when trying to obtain needed medical care and timely preventive services.”

This recent wave of unemployment-driven health care withdrawals is only part of the story. Staggering costs for even the most basic medical care mean that average Americans just like you are often unable to afford the bare basic necessities—even for those who are employed and insured. The Commonwealth Fund report found that approximately 22 million working adults couldn't afford food, heat and rent due to medical bills in 2010. The report showed that health costs forced 4 million people into bankruptcy.

And while the report found that last year's health care overhaul legislation could be a saving grace for many, filling large gaps in the coverage and ensuring that nearly everyone, including the unemployed, has access to affordable health insurance by 2014, many Americans are in dire need of taking their financial situations into their own hands right now. As the recent national squabbles over health care have made clear, millions are uninsured through no fault of their own—unemployment, pre-existing conditions, and now states axing health care for entire workforces—and an unexpected accident, injury or illness, even with minimal impact on health, can have major consequences for their budgets.

Which brings us to another point: with medical debt becoming one of the most common reasons for personal bankruptcy filings, any changes in coverage often mean major costs for the “formerly-covered” with only one viable solution: bankruptcy.

As such, if you are suffering from illness, injury and out of control debt, and considering filing a medical-related bankruptcy, it is important to remember that as unsecured debt, medical bills can be discharged entirely under Chapter 7 or Chapter 13 bankruptcy. Indeed, bankruptcy may be just what you need to help you get back on your financial feet again.

The bankruptcy attorneys at the Law Offices of John T. Orcutt offer a totally FREE debt consultation for those needing a budgetary resuscitation. Just call toll free to +1-919-646-2654, or you can make your appointment online right now at www.billsbills.com. Simply click on the yellow “FREE Consultation Now” button and let the experts help your overall financial health.

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