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Americans are living longer. A 65-year old retiree can expect to live another 20 years. Male life expectancy is about 81 years, and female life expectancy is about 85 years. The average life expectancy in 1900 was: males, 48 years and females, 51 years.
However, as we age we experience an increase in our personal healthcare spending. The Kaiser Commission on Medicaid and the Uninsured, July 2004, states that in 2002, average annual medical expenditures for those over 65 years was $7886 per year, compared with 55-64 year olds which was $5178 and 45-54 year olds which was $3546 per year. Furthermore, the risk of high medical expenditures increases with age. For the 65+ group, 19% were at risk for incurring medical expenditures in excess of $10,000 compared with 45-54 year olds in which only 7% were at risk.
U.S. annual expenditures on healthcare have doubled in the past decade rising $1.8 trillion in 2004, up from $888 million in 1993. By 2014, total health spending is projected to constitute 18.7% of the gross domestic product, up from 15.3% in 2003. ‘U.S. Health Spending Projections 2004-2014 by Heffler, Smith, Kahan Borger Clemens Truffer,’ February 2005.
Therefore, we can expect growth in individual out-of-pocket spending. Consequently, medical debt for seniors is and is going to continue to be a major problem for seniors.
Unfortunately, seniors are in a vulnerable position when they seek medical services. The products they seek are essential and often life saving. Purchases are often sudden and unplanned, which may bring large financial burdens. Seniors can experience high levels of medical debt even on Medicare. Nearly all Americans over 65 have Medicare as their primary source of health insurance coverage. However, Medicare covers mostly acute care services and requires seniors to pay part of the cost, leaving about half of health spending of seniors to be covered by other sources, such as Medigap, etc.
Practice Tips on Dealing with Medical Debt
· Do your homework!
Do you actually owe the alleged debt?
· Do you have medigap or other health insurance to cover the alleged debt?
Was your insurance claim denied? If so, why?
Identify the services allegedly provided for the amounts charged.
· Are there any other sources of payment? Other sources of insurance?
Other sources of payment: former employer, divorced or separated spouse, veterans administration, automobile insurance if automobile related. Local or national associates sometimes offer treatment subsidies.
· Negotiate settlement with the creditor.
Approach hospital or other provider for reduction in amount owed – ask for sliding scale. Hospitals, etc. are more inclined to accept reduced amount rather than you filing bankruptcy, which completely discharges the medical debt.
· File for Bankruptcy.
Upon filing a petition in federal court seeking protection from creditors, the court assumes legal control of the debtor’s assets and halts the collection efforts. At the conclusion of the bankruptcy, you may be free from most debt.
Seniors medical debt is on the rise. Some 38% of seniors live at or near the federal poverty level and an unanticipated and uninsured healthcare incident can be financially devastating. Bankruptcy filings by seniors is higher than ever, largely due to medical debts.
Overall healthcare expenditures will continue to rise, while with the changes to Medicare and Medicaid on the horizon, you can expect a shrinking of funds available through public programs to help pay for these expenditures.
Large out-of-pocket expenditures for health care services have been shown to encumber access to care, affect your health status and quality of life and even leave insufficient resources for other necessities.
[1] Note: This document is meant for the clients of The Law Offices of Jerold E. Rothkoff. Before acting on any information presented here, you are strongly urged to consult with an attorney who is competent in this area of the law.