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Insufficient health insurance plans lead some to bankruptcy

Anybody who has ever been involved with a company dealing junk health insurance knows how frustrating this can be. One of the defining marks of such plans is that they offer extremely limited benefits. While these plans provide emotional comfort to those who are not currently sick, they show their true worthlessness when catastrophic illness strikes.  When an insurance company fails to provide coverage the consumer thought would be there, the bills add up very quickly.

All too often, responsibility for the lack of understanding among consumers lies with the insurance company, many of which do not adequately inform new customers of what they are getting into. Fortunately, the Affordable Care Act has helped improve the situation a little bit, forcing some insurance companies to change the way they operate so that they are more consumer-friendly. There are still plenty of junk plans out there, though, and consumers need to be aware of this. 

Experts in the industry say that consumers can help themselves avoid such plans by working with a licensed independent health insurance broker, consulting a state insurance department, avoiding search engine shopping and solicitations for health insurance coverage. Consumer Reports has a number of other good tips on shopping for health insurance as well.

With the costs of medical care being so high, medical debt can quickly drive one into bankruptcy. In fact, medical bills are one of the leading causes of bankruptcy filings. Because of this, it is more important than ever for consumers to be informed both about their health insurance plans and their right to debt relief. 

Source: Ledger-Enquirer, “‘Junk insurance’ comes back to haunt its policyholders,” Tony Pugh, December 19, 2013. 

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