Medical bankruptcy–when high medical bills force people into insolvency– is common in the United States but also occurs in Canada. There are many medical bills associated with illness and healthcare issues that can cause severe financial problems. According to a blog post from McCarthy Law 25% of all credit card charges are related to medical costs. Furthermore, debt management experts Hoyes and Michalos say that 15% of insolvencies list medical costs, illness or injury as a primary cause of bankruptcy. How can you make sure this doesn’t happen to you?
Janet was a new real estate lawyer with a young family. She had just paid off her school loans and was beginning to make headway in her small law practice. However, she soon received dreaded news. She had breast cancer, an illness found amongst 1 in 3 adults. Shortly after the diagnosis, Janet could no longer work for days at a time. Her husband, an IT consultant, was supporting the family and helping to care for the young children, while Janet attended her doctor’s appointments. Soon the cancer drug bills began coming in, totaling to thousands of dollars most months. They had no health insurance, which made things worse. They first used their savings, and then because of all their debts, declared bankruptcy. This financial hardship could have been avoided.
Jackie’s Story: From surviving to thriving
In contrast, let me tell you about another young mother, Jackie. She was also a lawyer and young mother who had been diagnosed with breast cancer. We met at a networking event and talked about the risks of getting sick and protecting her business and family from the astronomical costs of illness. She had life and long-term disability insurance but hadn’t considered what to do, in the case that she had to pay enormous amounts of money, out of pocket, for drug expenses.
Initially, she wasn’t convinced about paying for more insurance, as she was already was cash strapped. However, when I told her about Janet, she re-thought her position. Luckily, we got her an easy and quick way to get coverage for unexpected catastrophic medical expenses, as well as a small critical illness policy. Today her business is thriving and she is in remission, partly, because she was able to focus on her recovery without financial stress or extra expenses.
As self-employed members of the workforce, we are often so stressed and busy that we don’t always take the time to think about our future or our health. I’m so glad I was there for Jackie when she needed me. Time is money, as the saying goes, but don’t just think of the economic costs. Rather, think of the psychological costs and consequences of putting off planning for unexpected and costly health issues. Lifelong health isn’t guaranteed to anyone. That’s why we all need complete health care coverage for ourselves, spouses and families, to help us when we get sick.
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Opinions expressed in this article are those of the author and not of The HR Gazette or its team members.