Bankruptcy and medical debt go hand-in-hand. One of the top reasons that people file for bankruptcy is because their medical bills have become overwhelming. They’re unable to pay what they owe, so they’re looking for a fresh start.
One reason why this happens is because people will get out-of-network services. They may not know that this is what they’re doing at the time, but a later analysis of the medical services rendered will show that they were out of the network approved by the health insurance provider. This makes bankruptcy much more likely.
Why this is such a problem for patients
This is an issue because health insurance can deny payment for services that are not in the network. A person may wind up with $100,000 in medical bills, for example, that they assume their insurance should cover once they pay the deductible. But if half of the services were out of network, the insurance company may refuse to pay for $50,000 that the patient thought would be covered. There’s no going back after they have purchased those services, so they suddenly have unexpected debt.
Necessary emergency services
Another issue to consider is that this often happens with emergency services. Someone who needs immediate care doesn’t have time to shop around. They may not even bother to ask about what network the hospital is in. They simply go to the nearest medical center and use those emergency services, focusing on health more than logistics.
That is the right focus, but it can lead to serious debt issues. It’s important for patients who are facing this type of debt to understand all of the options they have.
