Once you have decided to declare bankruptcy to alleviate an overwhelming medical debt, you need to think about the best way to protect yourself in the future. Unless you take steps to prevent this debt from happening again, you may end up with medical debt again without the benefit of filing a new bankruptcy. Protecting yourself from future medical debts should be one of your first concerns when filing for bankruptcy under Chapter 7 or Chapter 13. People who went bankrupt because of devastating medical expenses have learned the hard way that Health insurance was inadequate and failed to fully protect them from financial disaster. Most people are insured by a health plan provided by the employer. These plans usually cover a small percentage of the costs incurred after a critical illness or emergency. Some people buy their own health plans. These people are usually self-employed. The coverage of individualized health care is very expensive and these plans also have limitations. Nevertheless, there are options that a person can take to supplement his medical insurance coverage, thus minimizing their risk, of being again overwhelmed by medical debt.
Personalize health insurance can be a useful tactic. People who take out their own medical insurance have the advantage of adapting their insurance plan to their individual needs. They can change their deductibles and coverage according to their particular health situation. Although employer-provided health insurance is generally less expensive, its ability to modify this plan to meet individual needs has declined. An option offered by some employers is to provide a replacement allowance for health care insurance. This allows an employee to purchase a more personal insurance plan.
Catastrophic coverage is another option that a person can take to protect themselves from future medical liabilities. Catastrophic medical coverage costs less and can be helpful in improving an individual's health plan by covering only medical emergencies.
A health savings account (HSA) can be a useful tool in the management of medical debt. It is a medical savings account offering tax benefits to taxpayers enrolled in a high deductible health plan. Funds paid to an HSA are not subject to federal income tax at the time of filing. These funds are renewed and accumulate from year to year if they are not spent. This approach allows the individual to set aside a certain amount each month in his HSA. These funds can be used to pay for deductibles and other health care expenses not covered by their health plan. A flexible expense account (ASP) is another tool offered by employers to help employees manage health care costs, but ASPs have significant disadvantages.
These are some examples that people can take into account when optimizing their health care insurance to protect them and their loved ones from medical debt and the threat of death. bankruptcy . A person must consider many other concerns when planning a medical emergency, such as loss of income. Medical emergencies are very unpredictable and no one is safe from the risks of a medical crisis. It is a good idea to plan the financial impact of a possible health care crisis.