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Medical debt forcing more Colorado consumers into bankruptcy

In 2007, 60 percent of all bankruptcies could be contributed to medical debt issues, according to research conducted by two Harvard University medical doctors. That is no surprise to one Denver resident who was diagnosed with organ failure in 2008 which resulted in numerous medical problems, treatments and hospital stays. And although she had government insurance as an 18-year employee at the Federal Bureau of Prisons, she was forced to file for bankruptcy in 2010 after racking up more than $15,000 in out-of-pocket medical expenses.

After undergoing multiple surgeries and further complications she was forced to retire from her job and is now disabled and does not yet qualify for Medicare. Two years after filing for bankruptcy she is still struggling to pay her medical bills and many of her debts are in collections with phone calls from debt collectors starting at 8:00 a.m. and continuing throughout the day.

This scenario is unfortunately more common than many might think. Another 2007 survey on health care issues by a private foundation that supports independent research, found that 72 million working-age American consumers, a whopping 41 percent, have problems with medical bills or are in the process of paying off medical debt. In 2005 that figure was 34 percent. If you add in the elderly paying off medical debt the figure rises to 79 million.

Clearly Colorado consumers and consumers throughout the country are struggling to pay for skyrocketing medical costs leading many to file for bankruptcy protection. The director of the Colorado Consumer Health Initiative said that they do receive a number of inquiries from consumers who are struggling with medical debt. Because of that feedback the organization pushed for a law this year that limits the amount hospitals can charge low-income uninsured patients as well as requires hospitals to offer payment plans to those who qualify.

It is commonly known that hospitals charge more for uninsured patients simply because they do not have the same negotiating powers that insured patients have through their insurance providers. A number of health care reform issues have been bandied about, with some even passing, however experts say it is not enough to prevent many from becoming overwhelmed with medical debt and seeking debt relief by whatever means is available to them.

Source: Colorado Public News, "Patients Go Bankrupt As Medical Costs Soar," Erika Gonzales, May 21, 2012

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