Filing Bankruptcy Due to Overwhelming Health Care Debt? Protect Your Future

 Once you have decided to go bankrupt to alleviate your overwhelming health debt, you need to consider how you can best protect yourself in the future. Unless you take steps to prevent the debt from recurring, you could get into medical debt once again without filing another bankruptcy. Protection against future health debts should be your first concern when filing for a Chapter 7 or Chapter 13 bankruptcy. People who went bankrupt because of devastating medical bills learned that their medical insurance was inadequate and failed to fully protect them from financial disasters. Most people are insured through a health plan provided by their employer. These plans usually cover only a small portion of the cost of a disease or catastrophic emergency. Some buy their own health plans. These individuals are usually self-employed. Personalized health care is very expensive, and even these plans have limitations. However, there are options that an individual can take to supplement health insurance coverage, minimizing the risk of being flooded with health debt again.

Personalizing health insurance can be a useful tactic. People who buy their own health insurance have the advantage of tailoring their insurance plan to their individual needs. They can change their deductions and coverage to reflect their specific health circumstances. Although employer-sponsored health insurance is generally cheaper, your ability to modify this plan to suit your individual needs has diminished. One option offered by some employers is to provide pay instead of health insurance. This allows the employee to purchase a more personal insurance plan.

Catastrophic coverage is another option an individual can take to protect themselves from future medical liability. Catastrophic medical care can be cheaper and useful in improving an individual’s health plan by covering only medical emergencies.

A health savings account (HSA) can be a useful tool in managing health debt. It is a fiscally subsidized medical savings account available to taxpayers enrolled in a highly deductible health plan. Funds paid to the HSA are not subject to federal income tax at the time of filing. These amounts are transferred and accumulated year after year if not spent. This approach allows an individual to set aside a certain amount per month in the HSA. These amounts can be used to pay deductibles and other health expenses that are not covered by the health plan. Flexible cost accounting (FSA) is another tool that employers offer to employees in managing health care costs, but FSAs have significant drawbacks.

Here are some examples that people can consider when optimizing their health insurance to protect them and their loved ones from health debts and the risk of bankruptcy. There are a number of other considerations to consider when planning a medical emergency, such as loss of income. Medical emergencies are very unpredictable and no person is free from the chances of a medical crisis. It is advisable to anticipate the financial implications of a potential health crisis.