Are You Struggling Too? Filings Have Increased This Year.
Unpaid medical bills the No. 1 reason
Senior bankruptcy is an emotional word for most people over 65 who struggle financially. It’s a last resort. There is, traditionally, something shameful in it. But, bankruptcy is occurring more and more frequently with people over 65. In years past, people were often driven to filing because of credit card debt or unpaid mortgages. Now, the No. 1 reason is unpaid medical bills.
Compared with 1991, the number of people over 65 filing for bankruptcy last year increased by a factor of three. In 1991, seniors were 2 percent of the total number of people who filed. Last year, their share jumped to 12 percent.
Since 1991, the economic challenges of paying for out-of-pocket Medicare costs has shifted from the government to individuals. While Medicare pays for doctor and hospital services, it’s the gaps in coverage that are causing the problem. Co-pays and deductibles and cost of medication, in other words.
Many Medicare beneficiaries’ incomes fall short
The amount of money needed to pay for gaps in coverage is out of proportion with most seniors’ income. Fifty percent of people on Medicare earn $26,200 or less each year. Twenty-five percent bring in $15,250 or less. Many have no savings to speak of.
Medical bills are taking a larger and larger slice out of annual income.
Many seniors with low incomes can’t afford payments for Medigap insurance. However, even those with private insurance have difficulty if the procedures or medications are not fully covered.
One unacceptable solution is to cut down on or stop taking needed medication. Many seniors turn to this solution, thinking to save money. However, from a health perspective, it can be a dangerous decision, leading to serious consequences.
The government needs to step in
Instead of trying to cut Medicare and making it impossible to lower prescription drug costs, Congress needs to understand the dire situation that many seniors find themselves in. The significant increase in senior bankruptcy filings because of unpaid medical costs should be a wake-up call to the legislators.
Medicare needs a makeover. Medicare should be able to negotiate drug prices with the pharmaceutical companies. There should be a cap on out-of-pocket expenses. More procedures should be covered. Escalating bankruptcy filing is a situation that never should have occurred in this country. Now that it has, Congress needs to fix it and guarantee that it never happens again.