Recently, a Madison, Wis., based CBS affiliate reported on a woman who, despite having health insurance, is on the verge of filing medical bankruptcy. The story is an unpleasant reminder that even after the new health care law went into effect people who suffer severe medical problems might still have to file New York bankruptcy.
The woman in the article was only 30 years old but suffered a sudden heart attack. Fortunately the paramedics arrived quickly and stabilized her, but she was comatose. They then took her to a hospital for treatment. However, the hospital in question was outside of her insurance network, and to make things worse, the nearest hospital from where she suffered her injury was only three blocks away, and it was in her network. Astonishingly, the mistake (if it’s just that) is the difference between $1,500 and $50,000.
Naturally, the insurer pointed the finger at the out-of-network hospital for its high costs, and it pleaded that it paid some of the woman’s $254,000 bill. Meanwhile, the hospital is claiming that it’s already written off tens of thousands of dollars in charges to her, and the woman negotiated an even lower final bill. Nevertheless, the remaining cost is quite significant.
Some of the people interviewed in the article noted that this kind of situation probably occurs more commonly than everyday people want to believe.
For New Yorkers who end up with an unfair amount of medical debt, it might be possible to refuse to negotiate with the hospital given that the patient doesn’t have any choice as to where treatment occurs. The result would certainly be legal action, but that might be costly as well.
Medical bankruptcy might be a viable (and possibly better) alternative. The debt owed to the caregivers isn’t secured by anything so it ought to be easily dischargeable in chapter 7. Moreover, if the patient has assets, the bankruptcy exemptions might protect him or her better than a negotiated agreement. Regardless, if something like this has happened to you, or more likely, a loved one, then talking to an experienced New York bankruptcy lawyer can help you estimate how much of your assets you can keep and how much debt will be discharged. This calculation can be useful in determining whether it’s worthwhile to negotiate with the hospital or simply initiate a bankruptcy proceeding.
For answers to more questions about medical bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced bankruptcy attorney New York Bruce Weiner for a free initial consultation.
