The New York Times, Insured, but Bankrupted by Health Crises:
Although the brochure on his Aetna policy seemed to indicate it covered up to $150,000 a year in hospital care, the fine print excluded nearly all of the treatment he received at an Austin, Tex., hospital.
He and his wife, Claire, filed for bankruptcy last December, as his unpaid medical bills approached $200,000.
It’s easy to blame the insurance company for selling a nearly-useless policy, and staring at nearly $200K in unpaid medical bills would make most Americans consider bankruptcy, but that’s not the whole story.
St. David’s says it tried to persuade them to apply for charity care, under which the hospital would absorb much, or all, of the unpaid bills.
But the couple says a lawyer advised them to turn to bankruptcy as the way to be certain they would not be left with too much debt. “I knew we were getting way, way over our heads,” Mrs. Yurdin said.
How many tales of “medical bankruptcy” are due to people listening to a lawyer who wants to generate fees instead of having an earnest conversation with the hospital about reducing their bill? The “dirty little secret” of the medical industry is that standard billing rates are massively inflated compared to what Medicare or insurance companies will pay. Try negotiating with the hospital before your account is sold to a collections agency and you may just be able to get it reduced by 80-90%, without having to qualify for any charity program and without affecting your credit.
Ultimately I favor a “single payer” healthcare system that covers everyone, but if we can’t have that then I think the first step in reform should be capping the massive disparity between what a hospital charges an insurance company and what they charge the uninsured. The amounts that hospitals bill the uninsured are unconscionable and indefensible. This is one of the few problems that our government should be able to fix with little resistance, and without raising taxes, debt, or unemployment.
