med-mal-bankruptcy
201608.10
0

How Can Medical Malpractice Lead to My Going Bankrupt?

You might be scratching your head over this one. The doctor makes the mistake, and yet it is the patient who goes bankrupt from the medical bills for negligent care. How can that be possible?

Unfortunately, it is possible, and it could happen to you.

The Frequency of Medical Malpractice

Medical professionals are only human, no matter how skilled and competent they are or how many years they have been practicing. The fact is, no one is perfect. However, an unavoidable outcome due to factors beyond the control of the medical professional is not the same as medical malpractice, which is caused by some form of negligence.

A 1999 report revealed that, every year, between 44,000 and 98,000 hospital patients die there because of preventable medical errors. While wide variance exists among studies, even if you trust only the lowest figure—44,000—that is more persons than died from either car accidents or breast cancer in 2014.

The same report points out that the total costs of preventable medical mistakes amount to between $17 billion and $29 billion per year. These numbers include additional medical care required because of the errors, lost income, lost household productivity, and disability.

Bankruptcy Due to Medical Bills

Medical bills are the biggest reason for personal bankruptcies in the U.S., bigger than credit-card debt or unpaid mortgages. Approximately 1.7 million people currently live in households that will end up declaring bankruptcy because of medical bills. But that’s not the end of it:

  • Over 20 percent of the U.S. population between the ages of 19 and 64 has trouble paying their medical bills. It works out to about 56 million of us.
  • More than 35 million folks will be contacted by collection agencies because of unpaid medical bills.
  • Over 15 million will liquidate their savings to take care of medical bills.
  • At least 11 million will take on credit-card debt because of hospital bills.
  • Almost 10 million will not be able to pay for rent and food because of medical bills.
  • Even people with good health insurance can have trouble paying their bills. Around 10 million of these folks will accumulate medical bills they will not be able to pay off this year.
  • Even those on Medicare are affected by the alarming problem of medical bankruptcy, as Medicare does not pay for everything, contrary to common belief. While Medicare certainly helps a lot of seniors, about 8 percent of all medical bankruptcies—one in 12—happen to those 65 and older who are on Medicare.

    Are Things Different under the ACA?

    The Affordable Care Act (ACA), otherwise known as Obamacare, has reduced the number of people with no insurance at all. However, those who have limited funds to pay premiums have generally opted for high-deductible plans. It is estimated that a family of four on a “preferred provider plan” can have healthcare costs of nearly $26,000 a year. That figure is triple what it was in 2001. This shocking rise in medical expenditures is due to a triple whammy:

  • Employers generally pay less of the shared costs for insurance than they did 15 years ago.
  • Insurance companies charge much higher premiums.
  • Higher premiums come with more limited coverage and higher deductibles for care, meaning a greater financial burden is placed on the insured person or family.
  • Medical Malpractice Leading Directly to Bankruptcy

    When medical professionals make errors, they are not usually the ones who have to deal with any financial obligation arising from the situations that caused the errors. Even when a treatment worsens a patient’s health, they are still expected to pay the treatment’s bills, adding insult to literal injury. So, you can be medically wronged through the most egregious negligence, and still be left holding the bag for the medical bills.

    Here is an all-too-common progression under medical malpractice:

  • Physical problems from the medical malpractice lead to job loss.
  • Job loss often leads to loss of health insurance.
  • Lack of health insurance, or expensive/inadequate insurance bought through an exchange, means an inability to pay for medical care, including the care to rectify the harm done by the medical malpractice.
  • Bills increase while income decreases.
  • The patient and their family turn out of desperation to credit cards and other high-interest sources of credit.
  • Before long, the patient and their family are socked with accumulating high interest, creating debt that increases exponentially. Late fees and penalties are assessed that sometimes total even more than the original debt.
  • Can bankruptcy, at this point, be far behind?

    Be sure you speak with a medical malpractice attorney before this scenario happens to you.