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Merely having health insurance does not prevent medical debt

On Behalf of | Sep 17, 2020 | bankruptcy

You may be one of the many Americans who are able to access health insurance coverage previously out of your reach because of the Affordable Care Act. The expansion of coverage under ACA can help to provide some protection in the event of an unforeseen injury or illness for which you require hospitalization.

While the ACA has improved your position, there is still a very real possibility that you could incur medical debt in significant amounts. The City University of New York explains why most of the people who file bankruptcy because of medical bills have health insurance.

Medical costs outpace income

When you have a serious illness or injury, it may require you to take time off work, sometimes for weeks or months at a time. While the Family Medical Leave Act allows you to take up to four months of unpaid leave in situations such as these, you may experience a loss of income even as your medical bills continue to mount up.

Many expenses go uncovered

While the ACA prevents denials on the basis of pre-existing conditions and health insurance covers most medically necessary treatments, it does not cover all expenses related to your medical care. To obtain an affordable premium, you may have a large deductible you must meet before your insurance company will start paying. You are also responsible for paying coinsurance and copayments, which can be unpredictable.

Comprehensive coverage is key

The solution is not, as some lawmakers have suggested, to leave people unprotected by gutting the ACA. Rather, policymakers should use the ACA as a starting point to create a comprehensive program that replaces income during illness with disability coverage and sick leave in addition to providing sufficient coverage.