A June 2009 article in the American Journal of Medicine stated that medical bills are behind more than 60 percent of U.S. personal bankruptcies, adding that more than 75 percent of these bankrupt families had health insurance but still were overwhelmed by their medical debts. According to a report by the Committee on Energy and Commerce, there were 1,900 health care-related bankruptcies in Alabama's 3rd congressional district alone in 2008 — all caused chiefly by the health care costs not covered by insurance.
A single health crisis can financially destroy a family so it is smart to think ahead, particularly when known risk factors exist in a family. Here are a few suggestions:
• Build up an emergency fund that covers at least three to six months worth of living expenses. A family still needs food on the table even if a breadwinner can no longer work.
• Buy a disability insurance policy that covers you in the event that you can no longer perform your "own occupation." If you can get a "non-cancelable" policy, your coverage can't be cancelled and the premiums can't be raised once your medical exam has been approved and your policy issued, as long as your premiums are paid on time.
• Execute a living will. A living will is a document that details what life-sustaining medical treatment a person wants to have or not have in instances of terminal condition. The living will should address issues such as resuscitation, life support technologies, use of artificial nourishment, and pain management. A health reform provision would have allowed Medicare to pay doctors for counseling patients about end-of-life issues like living wills but critics labeled the counseling as "death panels" so it was not included in the final legislation.
• Sign a health care power of attorney, sometimes called a health care proxy, so someone else can make medical decisions for you if you cannot make them for yourself. This document is much broader than the living will and provides for many types of health care decisions other than those relating to life sustaining treatment. For example, it might be used for someone who needs an unanticipated procedure in the middle of surgery.
• Contact your insurance agent or human resources person. Find out exactly what your health insurance plan covers and where your deductibles do and don't apply. A serious illness can quickly use up the deductible so this is where an emergency fund is important.
There are 40,000 uninsured residents in Alabama's 3rd congressional district, 10,800 of whom have pre-existing conditions. Health care will soon be more affordable for these families and the middle class as key provisions of heath reform legislation are phased in, but even then adequate planning is critical.