Medical bills can create a substantial amount of debt in very little time. Just emergency transportation to a hospital could cost thousands of dollars, not to mention surgery or other types of medical intervention, along with an extended stay in the hospital. An unexpected medical event that lasts for a few days could put someone in so much debt that they do not know how they will ever pay it off.
This is one of the reasons why medical bills often push people to file for bankruptcy. Along with overspending and income reduction, they are one of the top reasons for bankruptcy in the U.S.
One way that people try to avoid this outcome, however, is by buying a comprehensive health insurance plan. This way, they know that the health insurance will cover the costs, at least after they pay their deductible. They may still have to pay thousands of dollars to reach that deductible, but they do not have to worry about suddenly being $200,000 in debt. Is this a viable solution in all cases?
There can be exceptions
Health insurance certainly can help people avoid bankruptcy, but there is no guarantee. After all, there are some exceptions and ways that health insurance will not apply.
One example of this is that health insurance companies will have a network of service providers that they use. They have an agreement in place to cover these costs, but policyholders need to get in-network services in order to be covered.
So if someone has a medical emergency and just goes to the hospital that is closest to them, they may get out-of-network services. Even though they have insurance, it will not cover those costs.
Considering bankruptcy
When facing overwhelming debt, bankruptcy can be a viable option to clear that debt and move forward. Just be sure you know what legal steps to take.
