Health insurers and individuals who do not have health insurance coverage will spent around $2 trillion on health care costs in 2013.  This staggering expense has been the source of medical debt problems for countless Arizona residents. An unexpected medical condition that leaves a person unable to work can quickly lead to unmanageable debt.


Hospital bills and charges by doctors for services rendered in connection with a hospital stay rarely reflect the same costs billed to private insurance companies or Medicare. Hospital bills reflect the cost of medical care and facility charges that hospitals set on a chargemaster, which is each hospital’s list of prices they charge for services, facilities, medications and medical supplies. The prices on the chargemaster are usually higher than the amounts insurance companies or Medicare pay.


Consumers are billed at the chargemaster rates for medical expenses and not at the lower rates the hospitals accept from insurance or Medicare. Individuals might be billed $199.50 for a lab test for which the hospital agrees to accept $13.94 from Medicare, for instance. Cases of egregious markups of 400 percent on services and treatments rendered by healthcare facilities such as cancer treatment centers have, unfortunately, become all too common in the U.S.


As the federal government attempts to reform health care in the U.S., individuals with unmanageable debt related to medical expenses should speak with a bankruptcy attorney about debt relief or debt elimination options. For example, Chapter 7 bankruptcy might help a person eliminate or drastically reduce existing debt. A bankruptcy attorney can explain the eligibility guidelines that apply to Chapter 7 bankruptcy to help a consumer determine if it is the right choice.


If Chapter 7 is not available, Chapter 13 bankruptcy might be another option that a bankruptcy attorney might recommend to achieve debt relief. Reviewing the benefits and restrictions of a Chapter 13 bankruptcy with a bankruptcy attorney might provide a consumer with the opportunity to obtain manageable monthly payments through a court-supervised repayment plan.


Source: Time, “Bitter pill: Why medical bills are killing us,” Steven Brill, Feb. 20, 2013