With all of the controversy over mandated health insurance coverage, one very prominent problem still needs to be addressed by legislators. It is the fact that even though a person has health insurance coverage, not all of his or her prescribed treatments and medications are being paid by the insurers. This phenomenon is occurring in Arkansas and across the country, and it continues to create severe financial hardship that will likely result in bankruptcy filings in the foreseeable future.
When an insured person is hit with a substantial medical bill that the insurance company refuses to pay, it has a triggering effect that ignites all kinds of negative impact for the consumer. The bill may be disputed or a claim with the insurer may be filed, but that will not prevent the matter from having a negative effect on the person's credit report and credit score. Furthermore, consumers will sometimes turn to credit cards to pay the medical bill, thus running themselves quickly into overwhelming credit card debt.
The crisis is compounded by generally high debt that consumers are taking on with respect to student loans, mortgages, credit cards and car loans. This spiraling cycle of debt is taking a dire toll on a significant percentage of Americans today. Some experts see a true collective debt crisis on the horizon.
When something like a student loan or rejected medical bill is sent to a collection agency, it creates additional pressure and deterioration of the consumer's situation. As collections build up on one's record, things like car loans are given out only with increased, burdensome interest rates. The system is set up to give those who are financially independent the rewards of low interest and freedom from financial penalties. It is the struggling middle class working people who are squeezed by penalties incurred simply because they are struggling.
In many cases, consumers will reach that point of insurmountable financial hardship where the only feasible option is to file a personal bankruptcy. For those overwhelmed with unsecured medical and credit card debt, a bankruptcy will wipe out the debt and give the individual or married couple a true fresh start. The best way to proceed in Arkansas or elsewhere is to consult with an experienced consumer bankruptcy attorney to find out the options and whether one is qualified to file.
Source: politickernj.com, "Americans Drown in Debt While Some Profit", Ann Twomey, July 11, 2016