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Medical Debt Among People With Health Insurance

Summary of Medical Debt Case Studies

Ben, 59, Trucker

Income: $68,000 (590% FPL)
Medical bills: $5,000
Bills incurred by: Self
Timing of bills: 2012 (2nd time in medical debt)
Insurance status during bills: Employer Sponsored Insurance (ESI)

Ben has good health insurance through his job with a trucking firm.  The policy has a $250 deductible, with 20% coinsurance to an OOP limit of $3,000 annually per person.  He and his wife are covered under the plan.  She takes medications and requires regular physician visits for a chronic condition.  He has diabetes and suffers chronic back pain following a fall.  Last year he needed surgery, with a brief readmission following a complication.  His share of expenses came to more than $5,000 – mostly from in-network cost-sharing, but a significant amount of balance billing.

Ben was surprised at the “truckload” of bills, not only from the hospital and surgeon, but anesthesiologist, radiologist, labs, imaging facilities, and other providers, many of whom he did not select and were not in his plan’s network.  “I found out one thing.  Anesthesiologists aren’t with anyone’s network.  That was a surprising thing to me.  I only learned this after the bills came.”  Ben’s share of the anesthesia bill alone came to $900.    This was Ben’s second bout with medical debt.  Ten years ago, his wife was seriously ill and needed surgery.  Bills from that event were much higher, eventually causing the couple to file for bankruptcy.

Charlene, 51, Teller

Income: $38,000 (195% FPL)
Medical bills:  $23,000
Bills incurred by: Self and daughter
Timing of bills:  2010-2011
Insurance status during bills:  Uninsured

Charlene, her husband Craig, and their teenage daughter had health insurance until 2009, when Craig lost his sight, job, and health benefits.  Before they lost coverage, the family had accumulated about $8,000 in unpaid medical bills from Craig’s treatments, mostly due to cost-sharing.  Then after losing coverage, Charlene’s daughter was hospitalized in 2010 after an accident, and Charlene needed surgery in 2011.

The hospital bills, alone, totaled $23,000.  Though the hospital web site notes a charity care program, the only relief offered to Charlene was a payment plan with monthly installments of $800, which she could not afford.  The billing office recommended she take out a loan or use credit cards.  Charlene charged about $5,000 in bills to a credit card, and then stopped when she realized how finance charges increased the debt.

The debt was turned over to collections; Charlene described the calls as harassing, often early morning or late at night.  She took $20,000 out of retirement savings to pay some of the bills, as well as living expenses – it had taken her 14 years to save that much – and also cashed in her daughter’s college savings of $5,000.  With more bills to pay, she finally filed for bankruptcy, and all remaining debts were discharged in 2012.  Charlene has a new job with health insurance and her daughter is in college on a scholarship.  For now the family feels okay.

Dorothy, 59, Teacher

Income: $34,000 (300% FPL)
Medical bills: $4,500
Bills incurred by: Self
Timing of bills:  2011-12, and ongoing
Insurance status during bills:  ESI

Dorothy has worked for the public schools for 20 years and has been covered under her job-based plan.  Her premium contribution of $190 is deducted from her monthly paycheck.  Originally, she was offered an HMO plan with very comprehensive coverage; in 2000, she was diagnosed with cancer and recalls paying almost nothing out-of-pocket for her care.  Since then, the school district changed to a PPO plan with a $2,000 deductible with 20% coinsurance to an OOP limit and tiered copays for prescription drugs that range from $17 to $100 for the drugs Dorothy takes for several chronic conditions.   Her monthly drug copays come to $150 each month and on her income and crowd out other expenses.  She needs to replace her furnace but can’t afford it, so uses a space heater during the winter instead.  She used to work a second part time job at a department store, earning an additional $600-700 per month, but had to quit when her condition worsened.

In 2011 she was hospitalized for a few days with an infection.  Her share of the bills came to $4,500 of which she still owes $3,000.  The hospital offered a $250 monthly payment plan, which Dorothy couldn’t afford, then reduced the monthly payment to $50.  Dorothy also owes money to the doctors who treated her while in the hospital.  She was surprised to receive so many doctor bills from that brief stay.  Initially she tried to pay them with credit cards, but realized this just increased what she owed.  The doctors turned unpaid bills over to collections.  Dorothy says those calls (though polite) are overwhelming, as are the bills.  She’s determined to pay and avoid bankruptcy at all costs, but the best she can do is “stack up the bills and just pay what I can when I can.”

Recently Dorothy went for her annual mammogram; the deductible applied so she owes another $208 for that.  She wasn’t aware that preventive mammograms are supposed to be covered 100% or that she could appeal the plan’s decision to apply the deductible.  She did not know her state has a Consumer Assistance Program that would help her file an appeal.

Dorothy is stunned to be in this position, even though she works full time and has health insurance.  She assumed her coverage would keep care affordable.  Now she’s worried to owe so much in medical bills that she just can’t afford to pay.  “Once I thought I was headed toward being middle class,” she said, but not now.  She gets up at 5:00 each morning to get to school by 7:00 and most days works another three hours after the kids are dismissed to prepare for the following day.  She said that’s just what’s expected of teachers, and she doesn’t really mind, but notes “when I call the bank or the hospital and tell them I’m a teacher, I still have to pay just like anybody else.”

Gwen, 57, Medical Transcriptionist

Income: $22,000 (140% FPL)
Medical bills: $40,000
Bills incurred by: Husband
Timing of bills:  2011
Insurance status during bills:  ESI

Gwen and her husband, George (64) have health coverage through her full time job.  It’s a high cost-sharing plan with a $3,000 deductible per person, then 30% coinsurance to an annual OOP limit of $10,000, not including the deductible.  For out-of-network coverage the deductible and OOP limit are twice as high.  Their plan year begins in June.  George suffers from diabetes and other chronic conditions, and was laid off a few years ago.  In May 2011, he had a cardiac emergency requiring surgery.  He lost eligibility for his unemployment benefits while sick because he was no longer actively working.

Because his hospitalization occurred at the end of the plan year, he had to satisfy two in-network deductibles and one in-network OOP within just a few months.  In addition, there were extensive non-network claims from hospital based physicians, none of whom George chose.  Even worse, George received poor care in an in-network rehab facility following his initial surgery.  Complications led to re-hospitalization and second surgery.  Following that his doctor recommended rehab within the hospital.  The rehab unit was independently owned and not in plan network, but Gwen agreed because George was too fragile to move.  George’s share of the cost of his 3-week stay was $23,000.  By August 2011, they owed $40,000 in medical bills. Interestingly, almost no balance billing charges arose from the nonparticipating providers.  Most were party to a “MultiPlan agreement” with an independently established fee schedule.  Gwen’s insurance paid based on that fee schedule amount and providers agreed to not bill in excess of that amount.

Another ambulance claim for $1,000 was denied. Gwen wasn’t sure why; an earlier ambulance claim had been covered.  The “explanation of benefits” did not provide a clear reason, though an earlier ambulance claim had been covered.  It did not occur to Gwen to appeal the denial or out-of-network charges, and in any case, she doesn’t know where she would have found the time.  As the sole breadwinner, she must continue to work full time to maintain income and insurance, plus she must care for her sick husband.

Gwen said as the bills streamed in, she just “set them aside” because she had no money to pay them.  The nonprofit hospital offered to cut what they owed by 40% as part of the charity care program, but other providers, including the independent rehab unit within the hospital, just turned them over to collections.  Gwen took $10k out of retirement to pay some of the bills.  Without George’s income, she also fell behind on the mortgage.  The bank would not agree to modify the loan, and Gwen needed to keep up with George’s ongoing care needs as well as basics like groceries, so “I let them take the house.”

Once the house went into foreclosure, Gwen was able to pay down more of the medical debt, though she still owes about $9,000.  Fortunately a friend helped them find a less expensive house to rent.  This year George turns 65 and will enroll in Medicare, further reducing the couple’s insurance premiums and cost-sharing expenses.

Kieran, 43, Car Dealer

Income: $75,000 (240% FPL)
Medical bills: $20,000
Bills incurred by: Spouse, children
Timing of bills:  2007-2011
Insurance status during bills:  ESI

Kieran has health insurance through his job with a large employer that also covers his wife and their four kids.  They contribute $137 bi-weekly toward the premium.  The PPO plan has a $1,000 deductible per person ($3,000 for family), then 20% coinsurance for most inpatient care, though a $300 per admission copay applies for hospitalization.  The ER copay is $150; doctor visits have a $25 copay.  Under a tiered drug benefit, Kieran pays $200 monthly for one drug.  An annual OOP limit of $3,000 per person doesn’t cover all copays. Kieran’s wife, Jenna worked part time until a few years ago, earning about $18,000.

Jenna has had a series of health problems that generate significant medical bills, but were manageable until 2007.   She developed blood clots in her leg and had to start taking clot thinning medications and stop taking birth control pills.  Not long after she got pregnant with complications (preeclampsia) which led to a series of short hospitalizations (10-11 for mom and baby, combined) and medical bills from dozens of providers.  The following year Jenna developed diverticulitis, requiring more ongoing. care.  The family also incurred significant expenses from copays for routine care for the kids, such as doctor visits for minor illnesses and trips to the ER for football injuries.  Kieran estimates his unpaid medical bills reached $20,000 over five years.  About half of his bills were for hospital stays, a quarter for physician visits, and a quarter for prescription drugs. Several doctors who treated his wife and daughter in the hospital were out-of-network, though Kieran didn’t know that ahead of time.  That meant he owed higher, 30% coinsurance, plus balance billing. He recalls his share of one anesthesia bill alone was $500.

He emphasized what the second income meant to his family finances.  “With four kids, there’s always something – lunch money, something – and we couldn’t make it without her pay. Then when the medical bills started, things got out of control.”  He took a second, part time job and he and his son mowed lawns on weekends, but they had to cut back on a lot.  “When my son broke his glasses, he had to wait a year before we could afford to get new ones.  None of us went to the dentist for two years. We let one of the cars go.”

Some of his wife’s insurance claims were denied by the insurer and he did a lot of research to try to have these decisions overturned. He wrote to his congressman and others for help. In some cases he was able to have the charges covered and in other cases not. He wasn’t aware his state had a Consumer Assistance Program that could have helped him with the appeals.

Kieran negotiated with providers to reduce what he owed.  One hospital did reduce his bill by about 30 percent if he agreed to pay the balance immediately – he put the $6,000 payment on a credit card.  Others said Kieran earned too much to qualify for their charity care programs.  One hospital refused to pre-register his wife for a hospitalization until past bills were paid.  Fortunately, about then Kieran received his annual bonus of $1,600 and gave that to the hospital so his wife could be admitted.

Kieran managed the bills himself using a spread sheet, but the sheer number was overwhelming. “There were so many coming in, I didn’t even want to check my mail,” he said.  The payment plans he’d negotiated mounted up; during 2010-2011 he was paying $200 per month across six different payment plans.  When he couldn’t afford the entire monthly payment he always paid something, though the more he paid to providers the less he could pay toward credit card debt (which included thousands in medical expenses) where finance charges were compounding. Some providers accepted partial payment, but three turned him over to collections.   He pulled about $13,000 out of his 401(k) to pay some bills. The financial burdens started to strain their marriage.   Kieran emphasized how important it was to him to pay what he owed, he prayed over what to do.  Finally his pastor referred him to an attorney who advised filing for bankruptcy.

In 2011 the family filed for Chapter 7 bankruptcy, discharging their medical and credit card debts.  Kieran says he’s in much better financial shape now.  His wife’s feeling better, though she hasn’t yet returned to work so the family continues to economize on everything from groceries to the water bill.  They still get by on one car.  He has one small credit card for emergencies and his credit score is improving – at the height of the medical bill problems it fell below 500 but is up in the 600s.

Kris, 56, Construction Worker

Income: $38,000 (330% FPL)
Medical bills: $6,000
Bills incurred by: Self
Timing of bills:  2011
Insurance status during bills:  ESI

Kris works full time for large employer and has health insurance through his job.  The plan has a $500 deductible, then 80/20 coinsurance and $35 copays for outpatient visits.  He’s not sure what the OOP limit is.  His premium contribution for the plan is $48 per month.  Kris was sick for most of 2011 with complications from a severe allergic reaction and hospitalized three times that year.  His out-of-pocket expenses that year reached almost $6,000.   He couldn’t work while he was sick.  He drew vacation pay the first three months, and then had to go on long term disability which paid just 60% of his salary.

Most of his debts are due to cost-sharing.  The hospital was in his plan network, but not all of the doctors who treated him were, including one consulting allergist who billed Kris $1,200 for two bedside visits.  Kris never asked to see this doctor and said he didn’t even treat him – “just gave me a sheet of paper about what to do to avoid allergic reactions; he never even wrote me a prescription.  Kris got “nasty letters” from that doctor’s lawyer demanding payment.  “To be honest, I didn’t challenge or appeal this bill.  I was so exhausted at this point.  They were threatening to send to collections and not being nice at all, so I took an advance on my credit card and paid it.  It was the only source of cash I had available.”  Kris was unaware that a consumer assistance program in his state might have helped with appeals.  His church raised about $500 to help pay some other expenses.

Before he got sick, Kris had lived paycheck to paycheck; he didn’t earn enough to afford many extras.  With the income loss and medical bills combined, he had to rely on a home equity line of credit to make ends meet.  Eventually he paid the rest of the hospital and doctor bills with the home equity loan, so now that debt is much higher.  Still, it was important for Kris not to fall behind, not to declare bankruptcy, and to protect his good credit rating, which is over 700.    He lives with his father, who’s only income is Social Security.

Maisy, 51, Librarian

Income: $66,000 (280% FPL)
Medical bills: $30,000
Bills incurred by: Husband
Timing of bills:  2004-2011
Insurance status during bills:  ESI

Maisy and her family have had coverage through her job at a public university.  The plan had a $1,900 deductible, then 80/20 coinsurance to an OOP limit, which Maisy can’t recall.  Her medical bill problems related to her husband’s mental health care needs.  For years he suffered from anxiety attacks, addiction to alcohol and prescription drugs and other disorders including one suicide attempt.  He was hospitalized several times from 2004-2010.  He also lost his job in 2003, significantly reducing the family’s income.

Maisy recalls most of his treatments were covered by insurance but some expenses were excluded, including some claims following the suicide attempt, denied because the injury was self-inflicted.  Maisy also worried that time limits on coverage for inpatient care, including detox/rehab, may have made these interventions less effective than longer term treatment might have been.  Over the years, her husband’s share of the medical bills mounted to nearly $30,000.

Maisy tried to pay these debts by economizing.  “I’m a pretty notorious penny pincher, and we haven’t bought anything that wasn’t from a thrift store in years, but those sorts of medical debts you just can’t penny-pinch your way out of.”  She found the collections process overwhelming – their debts were transferred to collections agencies, some of whom later re-sold the debt to different agencies Maisy described as a “maze of credit industry players.”  Ultimately, Maisy and her husband divorced in 2011 and she filed for bankruptcy that year.  Last year, she was laid off from her job.  Today, she struggles to maintain her own insurance coverage through COBRA at a premium of $582/month. 

Morgan, 51, Entertainer

Income: $51,000 (220% FPL)
Medical bills: $35,000
Bills incurred by: Self
Timing of bills:  2008-2012
Insurance status during bills:  Non-group policy

Morgan is self-employed and since 2005, has purchased an individual market policy to cover himself, his wife, and their two kids.  Initially he found the premium and cost-sharing affordable, but over the years rates increased steeply and he tried to offset increases by agreeing to a higher deductible.  By 2009 the monthly family premium was over $1,200 and the annual deductible $5,000 per person.

Morgan had a bout with gastritis in 2008, generating significant cost-sharing.  He had worked out payment plans with providers and was still paying those bills in late 2009, when he was diagnosed with prostate cancer.  Surgery was scheduled for January 2010, so he satisfied two annual deductibles within a few months.  After the surgery, Morgan had to stop working, cutting the family income, and making medical bills and high insurance premiums even harder to afford.  They took $10,000 out of his wife’s retirement fund, leaving just enough in it to keep it open, then, for a while they used cash advances on their credit card to keep up with premiums and the mortgage, but that wasn’t sustainable.  He and his wife made a difficult decision – she dropped off the family health insurance policy, cutting the premium by $600/month, even though she has health problems, including diabetes.  A few months after that, Morgan filed for bankruptcy, discharging $35,000 in debt, mostly due to medical bills and insurance premiums.

A few months after the bankruptcy, Morgan went to ER with chest pains.  More than a year later, he’s paying the hospital $75/month for that bill.  His wife self-monitors her diabetes, mostly without testing since the test strips are so expensive.  Morgan sums up his experience this way: “Some people just drop coverage and go to the ER and pay nothing.  But I was trying to do the right thing and stay insured. It’s so frustrating that I came close to ruining myself financially to do that.  I spent thousands keeping my family insured. I have friends in Canada. They’re shocked to hear I pay more for health insurance than for my mortgage.  It’s unnerving at times to look at the numbers.  When I do my taxes and enter my health insurance costs, my tax software says ‘Are you sure? This seems high.’  Like a slap in the face. One year my health expenses were over $20,000 and my AGI was $25,000.”

Richard, 36, Financial Adviser

Income: $130,000 (550% FPL)
Medical bills: $30,000
Bills incurred by: Self, daughter
Timing of bills:  2007-2011
Insurance status during bills:  ESI

Richard works full time for a large employer and gets health coverage for his family of four.  He contributes $250 each month toward the premium.  The policy has an annual deductible of $2,000 per person, with 20% coinsurance to an OOP limit of $4,000 per person.  Copays of $40 apply to most office visits, and tiered copays apply to prescriptions, up to $75 for specialty drugs. The copays don’t count toward the OOP limit.

Richard’s wife also works.  The family never had financial problems until the medical bills started. In 2007, Richard suffered a traumatic leg fracture at a sporting event.  He’s had 5 surgeries on his leg since then, plus extensive physical therapy and other treatments following complications from one of the surgeries.  In addition, in 2008 his daughter was born with respiratory problems and was in the NICU for two weeks. Following each surgery, Richard needed physical therapy three times per week for as long as 18 months at a time. That added another $500/month to his costs.  In 2010 alone, even with the OOP limit, Richard’s cost-sharing reached $12,000.

In addition, several times over the past five years, Richard has had to go on short term disability.  Benefits are about $1,500/week lower than his regular salary.  The couple had less than $5,000 in cash savings when the medical bills started.  They also had college accounts and retirement savings, which they did not disturb because “those are sacrosanct.”

The couple started charging medical bills and other living expenses to credit cards, then fell behind on payments and were referred to collections.  In 2011, Richard filed for Chapter 13 bankruptcy.  His credit card and medical debts, totaling $60,000, were consolidated and he agreed to pay creditors $905/month for five years.  In 2012, Richard had two more surgeries and so has new medical debts of $2,000, which he is also paying off gradually.  He hopes he won’t need any more costly care for a while; he’s not eligible to file for bankruptcy again for at least five years.

Safiya, 22, Restaurant Worker

Income: $10,000 (90% FPL)
Medical bills: $5,000
Bills incurred by: Self
Timing of bills:  2011
Insurance status during bills:  ESI

Safiya is a high school graduate who works at a fast food restaurant.  In 2010 she signed up for health benefits through that job.  She didn’t really understand much about the coverage, though she knew it was expensive ($90 was withheld from her paycheck every two weeks for her share of the premium) and she assumed it would pay her medical bills.  In 2011 she had several costly health claims related to a biopsy for a breast lump and some other health care services.  She reports her insurance wouldn’t pay these claims – when she called to ask why she was told she had exceeded the limit on her coverage – which appears to have been $5,000 annually.

Her pay fluctuates during the year. She works nearly full time in the summer but fewer hours in the winder when business is slower. In the winter her payroll deduction consumed most of her take home pay.  Safiya decided she couldn’t afford to pay that much for insurance that wouldn’t pay claims so she dropped the coverage.  She was left with $5,200 in hospital bills which she is paying off gradually ($90 per month.)  She still owes about $2,000 and moved in with her boyfriend to save on rent.  She knows it’s important to have health insurance, but doesn’t really understand how it works.  Recently she learned she is pregnant, so for now she has Medicaid coverage.

Sonya, 49, Homemaker

Income: $85,000 (360% FPL)
Medical bills: $60,000
Bills incurred by: Child, self
Timing of bills:  1994-2019
Insurance status during bills:  ESI

Sonya and her husband have two kids, age 22 and 18.  He is the sole breadwinner and the family is covered under his large employer health plan, for which they pay about $400/month.  Their policy has a $1,000 deductible per person, then 80/20 coinsurance to an OOP limit.  Sonya wasn’t sure exactly the amount.  Office visits are subject to a $50 copay.

Sonya used to work as a teacher but quit when their first child was diagnosed with autism at age four.  She says the family has “lived medical bills” ever since.  They’ve sought help from various pediatric specialists, speech therapists, and alternative medicine practitioners.  In addition, during three of those years, Sonya needed a hysterectomy, then treatment for an ulcerated colon, then foot surgery for bone spurs.  During the worst year their share of medical expenses reached $10,000.  Over 16 years they accumulated $60,000 in medical debt.

She describes the bills as overwhelming.  The year their out-of-pocket expenses reached $10,000, she didn’t realize it was that high until she did their taxes.  She said the bills and insurance statements were confusing – she knows some treatments for her son’s autism were simply not covered though she doesn’t know why. She never formally appealed any denials.  Some care was from out-of-network providers which generated balance billing expenses.  Even copays added up to significant amounts.  The local hospital agreed to a payment plan but Sonya says the doctors wanted payment up front.  The pediatric group recommended “Care Credits” a medical credit card.  It imposed no finance charge if the balance was paid within 18 months, but when she couldn’t manage that, 22 percent interest applied.  Another practitioner, not covered by the plan, offered Sonya a 20% discount if she would pay up front with a credit card.  So she started using other commercial credit cards to pay medical bills.  Her parents also helped to pay some of the bills.

Sonya said owing that much money was “way outside my comfort zone.”  She heard about ClearPoint on a talk show and called to see if they could arrange an affordable debt consolidation program.  They recommended she talk to an attorney who counseled bankruptcy.  They filed and their medical debts were discharged a year ago.  Sonya describes it as a nightmare and said talking about it was like “opening up a wound.”  She never imagined she’d file for bankruptcy.  Her oldest child continues to live at home and remains covered under the family policy.  Care needs are less intensive now and with the old debts cleared away, Sonya feels like she can manage.

Stuart, 48, Sales Manager

Income: $74,000 (315% FPL)
Medical bills: $6,000
Bills incurred by: Wife
Timing of bills:  2010-2011
Insurance status during bills:  ESI

Stuart and his wife and two kids have insurance through his job with a large employer.  The HMO plan covers all charges in network; out-of-network a $1000 deductible applies, then 80/20 coinsurance.  Stuart’s wife has Chron’s disease, a chronic condition that flares periodically.  About three years ago, her condition became so severe she had to stop working, cutting the couple’s income by about $30,000.  She required several specialized surgeries over three years.  Local surgeons were not experienced in the procedure, so they drove 60 miles each way to a university hospital for care.  In all, Stuart estimates their out-of-pocket medical bills reached $6,000 over two years.  In addition, he missed a lot of work driving back and forth when his wife was hospitalized.  Once her income was lost they put other living expenses on credit cards.

Stuart noted other stresses of the medical bills, dealing with insurance and collectors – the bills were so numerous that it was hard to keep track.  In one case he received what he thought was a duplicate bill from a radiologist for scans so set it aside.  Later he learned the bill was for a separate scan, and when it went unpaid for 90 days the radiologist turned it over to collections. He was amazed at how quickly bills would be referred to collections – he described it as “flipping” because it seemed automatic.  The hospital agreed to let Stuart pay his bill over time, but 90 days later, even though he’d missed no payments, the unpaid balance was referred to collections.  Stuart called to ask why and was told it was an automatic practice, just ignore the collections notices and continue making payments directly to the hospital.  Stuart said another time a provider referred to collections a bill that had been paid in full.  But it was up to Stuart to do the research to clear up this dispute.

Stuart also noted that, due to his family history of colon cancer, he went for his first colonoscopy before the age of 50. He expected it to be covered 100%, but cost-sharing applied.  When he called the plan, they said he would have to get the doctor to provide additional documentation in order for cost-sharing to be waived.  Eventually, Stuart got that done, too, but it was one more chore when he was already under stress.  “I’m a pretty easy going person,” he said, “but I can understand how some people go postal over this stuff.”  Stuart was not aware that his state has a consumer assistance program that can help consumers resolve claims problems.

ClearPoint helped Stuart set up a DMP and he has been paying down the medical and credit card debts at the rate of about $1,000 monthly. He expects to pay off all of his debts by the end of this year.  His next priority is to pay off the mortgage, which he also expects to do within a few years.   His family has had to cut back on just about every other expense.  Two of his kids are in college and, during the medical bills, Stuart had to reduce what he paid toward their tuition and books by several hundred dollars per month; the kids had to increase student loans to make up the difference.  Stuart is grateful he was able to work out all of the medical bills and other financial problems arising from his wife’s illness, but he wonders how well others might manage if they aren’t as vigilant as he was.

Claire, 44, Unemployed

Income: N/A
Medical bills: $50,000
Bills incurred by: Self
Timing of bills: 2008-2011
Insurance status during bills: Uninsured

Claire had always been insured and never experienced financial problems until she was diagnosed with an auto-immune disorder in 2008.  She lost her job and health coverage when she became too sick to work.  Though offered COBRA, at $400 per month it was unaffordable.  Before she got sick, Claire earned a good income and had healthy savings.  She always elected the maximum retirement savings contribution, plus had compiled a savings nest egg sufficient to cover her living expenses for six months.  All of that was lost to medical bills once she lost coverage.  In the face of ongoing medical bills, she finally declared bankruptcy.  Today Claire collects disability income benefits and has coverage again under Medicare.

Connie, 47, Nurse

Income: $50,000 (210% FPL)
Medical bills: $36,000
Bills incurred by: Spouse, children
Timing of bills:  1996 – present
Insurance status during bills:  ESI

Connie works as a nurse and her husband, Will, owns a small remodeling business.  Until recently, they and their two children were covered under a small group policy through Will’s job.  Their monthly premium for family coverage was $1,050.  The policy had a $5,400 annual deductible, and then paid 100% of covered expenses for the rest of the year.  Prescription drug coverage under the policy was limited.  An auto accident in 1996 left Will with chronic back pain requiring ongoing care.  In 2006 he had a heart attack and surgery, then, in 2010 he underwent surgery again.

For years the family struggled to pay the monthly premium and deductible, plus $600/month for prescription drugs that insurance didn’t cover.  The insurance company contested claims for Will’s second surgery.  Connie hired a lawyer and eventually the insurer agreed to pay, but in the interim the hospital pressed for payment, so Connie used her retirement savings, then a credit card to pay.

They also fell behind on their mortgage; the bank foreclosed in 2010.  The family moved to another home owned by Connie’s relatives.  They declared bankruptcy in 2011, discharging medical and credit card debts amassed to that time.  Connie has since qualified for health benefits through her job.  The premium is lower ($700/month) as the deductible ($1,400).  Will has had to stop working but his medical needs continue.  So medical debts are resuming; currently they are making monthly payments of $20 to one doctor and $150 to another.

Dillon, 48, Repairman

Income: $59,000 (529% FPL)
Medical bills: $19,000
Bills incurred by: Self
Timing of bills:  2003-2010
Insurance status during bills:  ESI

Dillon’s medical bill problems date back to 2003, when an uninsured driver hit him, injuring is back and totaling his car.  Dillon has health coverage through his large employer.  The plan has a $3,000 annual deductible. It doesn’t cover chiropractic or physical therapy.  Tiered prescription copays apply and there are no dental benefits.  The accident left Dillon with chronic back pain and severe depression.  Last year he paid $2,000 out-of-pocket alone for dental care.  His drug copays are another $170 per month.  Before the accident he worked a second part time job, but he’s been unable to work extra hours so his income fell by about 30 percent.

As medical bills piled up, Dillon borrowed some money from friends and used “Care Credit” and other credit cards.  Later he concluded the credit cards were adding to his debts.  In 2010 Dillon filed for Chapter 13 bankruptcy.   His debts were consolidated and he’s required to make payments of $530 per month.  He says he “lives like a college student” now, very frugally, clipping coupons and doing without many purchases in order to make the bankruptcy payment.  On his budget there’s no room for surprises – his truck needs a $1000 repair and he’s not sure how he’ll afford that.  As for his ongoing medical needs, Dillon puts off all care he can’t afford to pay in full.  He needs 4 crowns replaced but is going without for now.  He can’t afford all of his prescriptions, so only refills those he needs most urgently for back pain and the rescue inhaler for his asthma.  He recently bartered with one of his doctors to provide free care in return for Dillon providing some office repairs.

Duncan, 45, Teacher

Income: $50,000 (255% FPL)
Medical bills: $10,000
Bills incurred by: Spouse
Timing of bills:  2010-present
Insurance status during bills:  ESI

Duncan (a teacher), his wife Cara, and their child are covered under his plan at work.  Their monthly contribution for health coverage is $400.  The plan has an annual deductible of $1,000 per person, then 80/20 coinsurance to an OOP limit of $4,000 per person, which doesn’t include pharmacy cost-sharing.  It’s an HMO so all care must be received in network.  Late in 2010 Cara was diagnosed with breast cancer.  She had surgery in November, followed by chemotherapy and radiation therapy.  So she satisfied the annual deductible and OOP limit twice within a few months.  Her cost-sharing expenses came to just over $10,000.  Some providers were willing to set up payment plans, but others turned debt over to collections.  Cara also had to quit her part time job; she had been earning another 20,000 annually.  The couple had accumulated credit card debt even before Cara got sick.  Without her income they couldn’t keep up with the credit card payments or the new medical bills.  Duncan and Cara enroll in a debt management plan through ClearPoint.  All of their credit card debts and medical bills were rolled into a single payment plan.  They pay $1,000 each month (or one-third of Duncan’s take home pay) to the DMP; another $1,000 goes to the mortgage payment, leaving the family just $1,000 per month for all other expenses.  They are determined to pay their bills and so economize however they can, for example, using space heaters instead of filling the propane tank. Cara’s cancer treatment has concluded, though she continues to need periodic checkups and scans.  Each year as the annual deductible re-sets, this means more worrisome expenses. 

Elsie, 37, Writer

Income: $60,000 (310% FPL)
Medical bills: $20,000
Bills incurred by: Self, child
Timing of bills:  2007-2009
Insurance status during bills:  ESI

Elsie and her husband work for a small business and have health insurance through work.  Together they earn about $60,000 per year.  Until recently, their health plan the annual deductible was $1,000 per person, then 70/30 to an OOP limit of $10,000 per person.    They contribute about $325/month toward the family premium.  Last year their employer switched to a new plan that pays 100% after a $2,500 deductible per person.  Elsie vastly prefers this new plan.

Before their son was born in 2007, they never had any significant financial or medical bill problems.  But that year, their share of costs for the maternity care and delivery came to almost $8,000.  The following year Elsie developed severe mastitis requiring surgery and six weeks of nursing care.  Their son also suffered from chronic ear infections and was hospitalized twice before he was three.  All told the family’s share of bills reached $20,000.

Elsie was shocked that so many bills could result from a single hospitalization.  When her son was born she received bills from the hospital, obstetrician, pediatrician, anesthesiologist, radiologist, and others.  Generally each provider expected her to pay what was owed within 24 months, but she couldn’t afford those installment payments (some as high as $200.)  When she tried to pay smaller amounts, she was turned over to collections.  Elsie negotiated payment plans with some of the collectors, too.  But she owed dozens of creditors so monthly payments came to $800 per month, and sometimes she fell behind.  The stress of medical bills took its toll on Elsie and her husband; currently they are separated.  Elsie said it also ruined her credit rating.

At the end of 2009, Elsie entered a debt management program with ClearPoint that consolidated her bills and reduce monthly payments to $475.  She also took $2,000 out of retirement savings (one-third of all she’d saved.)  She’s on track to pay off her remaining debt this year.  Today her credit rating is getting better and Elsie’s proud she avoided bankruptcy.  Still she says something is really wrong with the system when such financial burdens can result for a young family who has always worked and always been insured.

Gillian, 59, Artist

Income: $10,000 (90% FPL)
Medical bills: $10,000
Bills incurred by: Self
Timing of bills:   2009-2010
Insurance status during bills:  ESI/uninsured

Gillian lives with her domestic partner, Candace, who works for a large employer.  Gillian is a self-employed artist.  Initially, the couple had health coverage through Candace’s job.  It was a high-deductible health plan.  In 2009, Gillian suffered severe diverticulitis and was hospitalized.  Her share of medical bills approached $5,000.  While sick, Gillian also couldn’t work; she lost many of her clients so the income loss has been long-term.  About a year later, Candace was laid off from her job.  Gillian didn’t qualify for COBRA under federal law and couldn’t buy a policy on her own due to pre-existing conditions, so became uninsured.  By then, the medical bills had mounted to about $10,000.  The couple emptied retirement savings to pay medical bills and living expenses and then started using credit cards.  In 2010 they filed for bankruptcy and discharged the medical debt.  Since then they’ve fallen behind on their mortgage and are fighting foreclosure.  Recently Candace got a new job with health benefits.

Jeanne, 64, Retired

Income: $24,000 (220% FPL)
Medical bills: $2,000
Bills incurred by: Self
Timing of bills:  2010-2011
Insurance status during bills:  ESI

A series of events caused Jeanne’s financial difficulties, only a small portion of which were due to medical bills.  As a retired state employee, Jeanne had good health benefits. The plan was comprehensive, requiring only $10 copays for most in-network treatment.  She also had a good income.  After retiring from government, Jeanne worked as a contract nurse, earning about $70,000 annually.   She is divorced and a cancer survivor.  She also has chronic back pain from an accident a few years ago and fibromyalgia.  In 2010, her daughter-in-law died suddenly, so Jeanne moved to California to help care for her son and grandson.  Jeanne closed her nursing practice and began collecting social security, reducing her income to $24,000/year.  When she submitted claims for follow up care for cancer and her other conditions from California providers, she learned her plan wouldn’t reimburse providers out of state.  She appealed but the denials were upheld, and Jeanne was left with $2,000 in medical bills that she couldn’t afford.  She started paying cash for ongoing care as often as she could, cut down on visits and sought some care from a local hospital.  She paid about $50/month toward the debt she’d accrued, even so, the hospital turned her bills over to collections.

In 2011 Jeanne learned that her ex-husband, who had been living in her house, failed to make mortgage payments and damaged the property.  Jeanne returned home to sort this out.  She ended up filing for bankruptcy to discharge all of her debts, including unpaid medical bills.

Katherine, 46, Customer Service Representative

Income: $19,200 (167% FPL)
Medical bills: $35,000
Bills incurred by: Self
Timing of bills:  2006-2009
Insurance status during bills:  ESI

Katherine worked full time for a small employer who offered limited health benefits.  In late 2006, she was diagnosed with breast cancer.  Treatment and reconstruction continued into 2009, and costs exceeded the limits under her policy, leaving Katherine with $35,000 in bills to pay on her own.   She negotiated payment plans with the hospital and doctors, but the monthly installments were more than she could afford and when she fell behind, she was turned over to collections.  Katherine says the collections calls were aggressive and upsetting.  She applied to a charity to pay some of the bills, borrowed from friends and family, and used credit cards to pay others.  She also moved in with her mother to save on rent.  In 2012 Katherine filed for bankruptcy and her medical debts were discharged.  She’s changed jobs and has new, better health benefits.  She’s not proud of the bankruptcy, saying “I was raised that you pay your bills.”

Louise, 58, Accountant/Unemployed

Income: N/A
Medical bills: $50,000
Bills incurred by: Self
Timing of bills:  2005
Insurance status during bills:  Individual policy (rescinded)

Louise is self-employed and had been covered under an individual policy.  In 2005, she was hospitalized with heart problems and shortly thereafter her insurer discovered an omission in her application and rescinded the policy.  Louise contacted her state insurance regulator, but ultimately the rescission was upheld.  The hospitalization therefore was not covered, leaving Louise with $50,000 in unpaid bills.   A few years later she filed for bankruptcy to discharge the debts.  Today she is unemployed and uninsured.

Millie, 52, Realtor

Income: $65,000 (340% FPL)
Medical bills: $20,000
Bills incurred by: Self
Timing of bills:  2007-present
Insurance status during bills:  Non-group policy

Millie’s health and medical debt problems coincided with the downturn in the economy.  She and her husband had both worked for a large employer, but decided to quit in 2007 to start their own real estate business, investing most of their personal savings in the new company.  They elected COBRA, and then converted to an individual policy.  The monthly premium was $1,200 and the annual OOP maximum under the plan was $10,000.  Shortly after they started the new business, Millie was diagnosed with melanoma.  Her treatment costs were extensive and she reached the OOP limit two years in a row.  In 2008, when the real estate market crashed, their income also plummeted.   They used up what was left of their retirement savings, then relied on credit cards to pay premiums and medical bills.  In 2011 they filed for bankruptcy, discharging the medical debts.  That year Millie’s husband got a new job with more affordable health benefits, though cost-sharing is still high ($4,000 annual OOP limit per person.)  She is still in treatment, and her unpaid medical bills are back to up $1,000 and still climbing.

Tanisha, 47, Unemployed

Income: N/A
Medical bills: $9,000
Bills incurred by: Self
Timing of bills:  2008
Insurance status during bills: Uninsured

Tanisha is divorced and was out of work and uninsured in 2008 when she had to be hospitalized.   According to Tanisha the hospital social worker applied for Medicaid on her behalf and she was under the impression that would cover her expenses.  She never received a card, however, and was billed $7,000 in expenses.  Years later, she is still in dispute with the hospital and doctors over these debts and says the collections calls are unpleasant and rude.

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