Medical bills are the leading cause of bankruptcy, according to a Harvard University study, which also showed that more than 75% of those who declared bankruptcy because of mounting medical bills had health insurance at the start of their illness.
These days, the word "insurance" may be a misnomer. Health care coverage no longer insures that the bulk of your medical costs will be paid. The safety net that medical insurance provided in the past has become riddled with holes so large that many people are falling through, leaving them nearly as vulnerable as those without insurance. These people are considered underinsured.
Two reasons for the recent upsurge of people who are worrying about health care costs and struggling to pay their premiums, even if they are employed and have health benefits through work or are eligible Medicare are below.
First, health care costs are rising at twice the rate of inflation and most Americans can't keep up. Bigger chunks of a person's income now go toward paying for insurance and treatments. Prescription drugs can be costly also.
Second, employers are passing more of the financial responsibility for health care onto their employees. In an attempt to save money, employers are switching from comprehensive coverage( broad contract that provides coverage for almost all types of medical expenses, with a few internal limits, and usually subject to a small deductible and coinsurance), to high deductible coverage. The result is that employees bear more of the cost. Premiums for health insurance through employers increased nearly 8% in 2006.
With the cost of maintaining health skyrocketing, consumers are desperately seeking ways to keep out-of-pocket costs as low as possible. Unfortunately, some options look good at first glance, but could end up further emptying your pockets. One way you can ease your worries is to fund your own health care by putting money in reserve. There are two ways to do this. Flexible spending accounts and health savings accounts (HSA's)..
Flexible spending accounts allow you to set aside money from your paycheck before taxes are taken out and use the account to pay for medical expenses throughout the year. Because you lose whatever money is left in the account at the end of the year, flexible spending accounts work best for known recurring expenses, such as regular prescription costs.
A health savings account works somewhat like a long-term flexible spending account, enabling you to save for medical expenses on a tax-free basis, but you also must have a HSA qualified high deductible health plan. Anyone younger than 65 who buys this type of policy can open an HSA. You cannot be enrolled in Medicare, however, or covered by another insurance policy that isn't a qualified high deductible plan. Contributions to HSA's are limited and adjusted annually. Unlike with a flexible spending account, the money in an HSA is yours and can be rolled over and used in future years, and even grow through investment earnings.
For more information about health insurance bankruptcy, try visiting http://www.bankruptcy.get-the-info.net or http://best-insurance-quote-online.com
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