Devastating Medical Bills Can Destroy Family Finances

The good news is... a majority of American families have some form of health insurance. 

'Only' fifty million Americans remain uninsured, but two-thirds without insurance are from working families.  However with or without insurance, it is becoming almost impossible to financially withstand a serious accident or illness.

Good stewardship may not be enough protection

A college degree, and working for a decade or so at the same job, were supposed to be the ‘secrets’ to withstanding a serious medical event.  Medical science and fancy pharmaceuticals may save lives; but unfortunately even with medical insurance and a steady job, it is difficult to juggle financial stability in the midst of a health crisis. 

Serious health issues are devastating to fragile family finances

Seemingly unending medical bills can be the death knell to home ownership and financial wellbeing.  When tragedy strikes an uninsured family, often they are faced with limited medical options and almost certain financial ruin.  Unfortunately most people may not be surprised to hear an accident or an illness has financially destroyed a family without insurance.  But what about those of us WITH insurance?

Medical costs are going up

The cost of insurance is rising, co-payments are increasing and incomes are not keeping pace.  Deductibles are skyrocketing along with the actual cost of medical services and pharmaceuticals.  It's no wonder families are torn between purchasing healthcare and making ends meet.

And then there are the "hidden" costs of long term medical care

There are visible and invisible costs from a serious accident, injury or illness.  It’s not just the bills with a hospital logo on the top that are draining family bank accounts. 

Working families or individuals will miss some time at work during a health incident. During medical treatment, income is lost or reduced, AND the bills are increasing.  The weighty burdens of maintaining home ownership with increasing utility bills and property taxes in the midst of stagnant salaries--often requires two jobs.  Immediate income loss is the first of many blows to any savings.  

Patients visiting a doctor or a hospital frequently can spend thousands of dollars on parking alone.  The fine print of insurance policies take time and energy to navigate.  People often underestimate the time it takes to keep your insurance company paying!  There always seems to be a ‘misunderstanding’ about what the charges are for and if they are covered by your policy.  Managing the relationship between your health care providers and your insurance becomes another ‘job’ that takes time and energy.

Everything changes

Schedules, careers and income all change--sometimes forever--to manage the burden of a sick child or parent.  Losing a job due to the health impact of an accident or illness only speeds up the crumbling of family finances.  Bankruptcy is often a choice when massive medical bills become overwhelming.  If bankruptcy is avoided, family savings may be depleted, retirement is cashed out and investments lost.  Selling, or losing, a house is often the first step in the destruction of the family finances after a serious medical incident.

The bad news is... we all need to worry about financial ruin if illness or injury befalls our family.  We are all vulnerable.  Welcome to living on the financial precipice.

Legal rights are likely not the first thing we think about during a crisis

The world seems upside down in the midst of a health crisis, and seeking out legal advice takes scarce time and energy.  Nevertheless, if a medical crisis occurs because of a company's faulty product or service, it is good stewardship to at least seek out information on your legal right to recover medical costs. It may be the first step towards regaining both physical and financial health.

~ Rhonda Radliff

5/10/2011