Financial Horror Story

It was a cold, clammy, rainy pitch dark night and I was extremely distressed-- well, not really it was a beautiful hot although rainy night in Florida but I was distressed.

My wife was in pain and it had been two days that the flashing pain on the upper left side of her face had started and thankfully was tolerable with over the counter medication.

But I was at the edge of desperation and so was she, particularly because as a former medical doctor I had an almost 100% certainty that it was trigeminal neuralgia.

Still my doubts abounded. What if it was a tumor or a vascular compression etc., etc. --- I would never forgive myself.

So reluctantly we go to the dreaded "emergency room" and go through the routine questions, do you have insurance? The answer was a definitive "no ", "I can't afford insurance". Are you in pain and if so tell me in a scale of 1 to 10 how much? My wife was in pain, but just in case we wouldn't be ignored she answered a loud "ten".

Then, the long waiting period, which really was quite reasonable-- about an hour and her name was called out by a nice lady who showed us the way to a private cubicle perfectly outfitted for a medical consultation. A couple of more minutes and blood was drawn, an I,V catheter inserted just in case.

Tension was building up and the emergency physician enters and greeted us with a foreign accent, he was nice and cordial and asked how he could help and so on. I explained that I was a former MD and that I had an idea of what was happening. Let's hear it he said and I confidently said "trigeminal neuralgia", he nodded as if agreeing.

"You need a CAT SCAN and some medication; he said'' and left the room. Even if time is altered in this setting, I'm positive that the doctor visit including questioning and a quick physical took at most a quarter of an hour. Then to the CAT SCAN, another 10 minutes and it was over. Last but not least we were escorted to the observation room, full of ailing patients.

After waiting about 45 minutes a kind lady from the financial department inquired about my income, dependents etc. Everything so far, so good, except that she bluntly informed us that the bill was $3560 and that we had some options in order to get a discount.

At this point, immediately I also had a headache and asked to speak with someone to clarify my financials and explain that I didn't have that kind of money. We were taken to a financial counselor at about midnight and after haggling "I really mean begging" I had to sign an agreement to pay about $300 a month for a year. I just couldn't take it anymore and signed, got the papers and left.

The story has a nice ending because after about two weeks and a lot of phone calls we returned to the hospital to continue 'begging" and a miracle happened. Under charitable grounds our $3500 bill was dropped to zero.

I thanked once and again the counselor, but was informed I would also receive individual bill from the radiologist, emergency physician and laboratory for about $1500 more and that if deemed necessary, I could ask for a discount and maybe even a charitable waiver.

The bills started rolling in as follows:

Hospital services ER total bill: 3560.68

Itemized as follows:

Brain CAT scan: $1802 (with health insurance: $285)
LAB: $322 (with health insurance: $152)
MEDS: 1.68 (1 Carbamazepine tablet costs $0.12 even without health insurance)
LEVEL 4 EMERGENCY: $1435 (with health insurance: $2,363 Price is for an Emergency Department Visit. No overnight stay Includes imaging studies like x-ray, CT or MRI.)

Billed separately about two weeks after:

Emergency physician: $784 (with health insurance: $211).
That's about $3136 an hour considering the ER doctor took around 15 minutes to question and examines my wife. Even Bill Gates would raise his eyebrow with this hourly income.
Radiology diagnosis: $210.14 (with health insurance: I really don't know)
Laboratory diagnosis: Up to the present date I have not received it.

All the numbers are to illustrate the ridiculous gap of prices between without insurance (retail) and with insurance (wholesale). But were talking about human beings, not DVD players, aren't we?

I recently came by the million dollar question: why do hospitals charge such outrageous fees to the uninsured? The answer is very simple "because they can" and why can they? Because health insurance companies negotiate rock bottom prices before the fact-you won't be doing that bleeding in the ER.

But aren't the uninsured supposed to pay less because they can't afford to pay for health insurance? This statement makes sense, but in reality these poor wretched souls pay triple or more of the normal price tag for a given exam or service.

The way I see it, it's another "catch 22" applied to big and I really mean big business in which some companies paid its CEO $102 million in compensations in a given year.

How's this sound for a fact:

"Approximately 41.2 million Americans who don't have health insurance have to pay astronomically high healthcare bills out of their own pockets" and "for the years 2003 and 2004, just over 50 percent of all personal bankruptcies were the result of medical debt by those with health insurance ".

Just to round it up and stir some controversy, I remember Michael Moors movie "Sicko" in which an American patient lost two fingers in an accident and had to "choose" which to have re-implanted according to the humongous fees which ran into tens of thousands of dollars. "Ring or middle finger"?

Understanding Medical Bankruptcy

Most people are surprised to find that of the estimated $1.5 million bankruptcies that will be filed this year, 62% of them will be the direct result of medical issues. Even more surprising is the fact that of those filing for medical bankruptcy, over 80% actually had medical insurance. Despite this, they managed to rack up medical debts that approach almost $18,000! This is just $9,000 less than the amounts owed by individuals who filed for bankruptcy due to medical reasons that lacked medical insurance.

While $18,000 seems like a small amount of debt to cause a bankruptcy, part of the problem is the aggressive nature of the medical debt collection industry. When you default on a credit card debt, the chances of you being sued are actually quite slim. More likely is that the creditor will work with you to establish some sort of acceptable payment plan.

In contrast, medical debt collectors seem to prefer litigation. They will often file lawsuits in small claims court on amounts so small that most other lenders would have not even bothered. Since most people are not accustomed to dealing with lawsuits, it is no surprise that many people panic and resort to filing for bankruptcy protection.

What is a Medical Bankruptcy

Technically speaking, there is no such thing as a "medical" bankruptcy. The only kinds of personal bankruptcies are Chapter 7 bankruptcy and Chapter 13 bankruptcy. There is no distinction by the cause of a bankruptcy.

Generally speaking, however, a bankruptcy that is classified as medical is any bankruptcy that is filed due to medical reasons. This can be caused by excessive medical bills, or a loss of income due to illness. In some cases, it is even the result of an individual getting a second mortgage to cover their expenses. If medical issues were the direct cause of the bankruptcy, it can be referred to as a medical bankruptcy.

The Medical Bankruptcy Fairness Act of 2008

An act was introduced to Congress in 2008 which if passed, would provide a legal distinction for medical bankruptcies. This Act would exempt $250,000 of home equity for those filing bankruptcy due to medical reasons. It would also eliminate the means test for people filing bankruptcy due to medical conditions. This means that many individuals with medical debts that are now forced into Chapter 13 would be able to file for Chapter 7. The act also offers some relief to caregivers of the seriously ill.