Saturday, May 3, 2008

Medical Debt

Medical debt is an issue for a lot of people with disabilities, so let's talk about it. According to one debt consolidator:

"Most people think that most of those who file bankruptcy did so because
they got way over their heads in credit card debt; however, research shows the truth is much more surprising. For the years 2003 and 2004, just over 50 percent of all personal bankruptcies were the result of medical debt by those with health insurance." http://www.bcsalliance.com/y_debt_medical.html

Another organization finds that:
"nearly 27 percent of filings are a consequence of primarily medical debt,
while in approximately 36 percent of cases medical debts co-exist with primarily credit card debts. Studying the post-bankruptcy scenario, we find that filers are 19 percent less likely to own a home even several years after the filing."
http://www.aei.org/docLib/20060719_MedicalBillsAndBankruptcy.pdf

What this analysis neglects is that a significant aspect of credit card debt often is medical debt because medical providers take credit card. In our situation, we would not need to file bankruptcy, nor would we want to, because we have enough assets to cover the debts and are young enough to start over financially, leaving much of our income dedicated specifically to medical expenses. Since we can do so, it's our responsibility to do so. Others do not have that luxury.

A review of our medical expenses for the past four months shows $2800 in medical bills after co-pays and insurance denials. We have also had, I estimate, $400 in pharamacy co-pays, $700 for our daughter's oral surgery. We also have the usual and always budgeted dental and optometric expenses. $800 for the cheap scooter. The remainder of the year will look similar. I anticipate fewer doctors' visits now that some issues are better diagnosed, but there's the surgery and PT at a $38 copay per visit.

So what does this mean? Budgeting a very large section of our annual income for medical expenses, at least $15,000. I don't anticipate continued MRIs since I don't anticipate changes there, but injections under anesthesia for pain relief cost me $450. This also means not making unnecessary follow up visits since it's not good for me or for the others on my insurance plan, and continuing to prioritize my medical problems as I have been. I should not feel guilty for not following up with all specialists. I trust my discretion there. I also need to insist on doing more of my physical therapy at home and get rid of my guilt about not going in as often as I "should." For my own sake, I need to insist on getting a plan I can follow at home set up, perhaps revisiting infrequently to add more exercises. Ten visits a month cost me $380. Already, I get lab results forwarded from one doctor to another so that bloodwork isn't duplicated. Even though my insurance company will still generally pay, that does no one a favor and just requires a bit of my time. We should also ask for payment plans from doctors' offices and hospitals since it's going to be at very low or zero interest versus much higher interest on credit card.

Ignoring the problem doesn't make it go away, of course, and we have to be exceedingly careful. We will actually keep our level of medical debt the same since we're about to receive a few thousand dollars back in taxes and almost $2000 in reimbursement for the lift before surgery. That still doesn't take into account a different scooter. I've not been able to justify the expense to myself despite the inadequacies of mine.

We will do fine. I am confident that we will. I am not unnecessarily worried since our debt is not continuing to increase. Our income definitely exceeds our monthly payments, though it does get difficult to absorb additional emergencies/unexpected expenses (such as an urgent home or car repair) when you have a lot of medical debt, however. It goes down for a while, and then we have another setback. We have choices and good options. We will be going to one vehicle, for example, at the end of this month, and we telecommute as much as possible to save gas money. We have a budget and stick to it. It means continuing to use the library, and it means continuing to buy items used rather than new. It means being satisfied with what I have, and I am. It means continuing to go camping and staying with my sister rather than expensive vacations. The only trick is that we may have to sell our home, and that may be the best option to keep us from paying most of our monthly payments toward interest and since our house has stairs.

What else does it mean? It means we make better environmental decisions, buying no more than we need. It means no fancy cell phones and, in fact, considering eliminating mine as soon as we can. It means continuing to play games with our children rather than going shopping. My children will continue to learn that they have enough and to budget their small allowances and gifts from relatives. These are all good for all of us.

3 comments:

Wheelchair Dancer said...

thank you for this honest discussion

WCD

The Angry Gimp said...

It's not surprising that so much debt is due to medical expenses. It's outrageous as well - if the profit were removed from the health care system, everyone could be easily accommodated.

It's nice that you can see a bright side, but it's sad too. You shouldn't have to sacrifice just to survive.

FridaWrites said...

It's a strong argument for universal health care and for more honest discussion--who wants to discuss their debts openly? It's embarrassing. It does not take long for medical bills to pile up quickly and then to spiral up because of interest.

But I know I'm not the only one in this situation. What's more, if we didn't have insurance, the medical care I would be able to receive I'd have to pay a higher rate for, since the insurance company most often doles out only 1/4 to 1/2 of the charge (and insurance contracts with the physicians say that I can't be charged for the remainder).

We just have to be exceedingly careful at this point, as much as we can. Any major home repairs or huge medical expenses at all, and this puppy (the house) is going on the market.