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Even those with insurance can be drowning in medical debt

It should not come as any surprise to residents of Illinois that the costs of medical care seem to be ever-increasing. Unfortunately, the reality is that even those who have health insurance find that it does not cover everything. They may still be paying a percentage of their medical expenses such as an emergency room visit, prescription drugs and an extended hospital stay. For some, these expenses combined with a high deductible can spell financial ruin should they become seriously ill or injured.

In fact, according to one professional, out-of-pocket spending on medical expenses for those who have health insurance supplied by their employer went up over 50 percent since 2010. The Kaiser Family Foundation also reports that last year 50 percent of those who received health insurance through their employer still had deductibles of $1,000 or more. Moreover, those who had to purchase their own policies through the Affordable Care Act's exchange found that they are facing high deductibles. 90 percent of these people report having a deductible over $1,000 for an individual health insurance policy or over $2,500 for a family health insurance policy.

Meanwhile, according to a recent report issued by the Federal Reserve Board, 44 percent of adults surveyed reported that if they were in an emergency situation that cost them $400, they'd be unable to pay for it out-of-pocket and would have to borrow money, use a credit card or put some possessions up for sale. Another survey revealed that over 25 percent of respondents reported that medical expenses severely affected their household's finances. A third survey revealed that 55 percent of respondents reported that at least one time, if not more, they were sent a medical bill that they could not pay. With all this in mind, it should come as no shock that medical debt was the biggest cause of debt collection calls.

Some people turn to charitable organizations or crowdfunding to meet their medical expenses, but often these resources are insufficient. Therefore, some individuals find that filing for bankruptcy is their best choice for dealing with medical debt that they cannot afford. Medical expenses combined with the fact that those who are very sick or severely injured cannot work means that many people in such situations are facing financial ruin. Filing for bankruptcy can be a way to wipe their financial slates clean, and start forward on fresh financial footing.

Source: The Atlantic, "Even the Insured Often Can't Afford Their Medical Bills," Helaine Olen, June 18, 2017

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