Prevent Bankruptcy from Medical Bills
Written by: Kristy Welsh
Last Updated: October 2, 2017
If you lose your job due to a debilitating disease, you lose your health insurance just when you need it the most, overwhelming medical bills are the number one reason people file for bankrutcpy. From doctors' visits, to hospital stays, to medications, the cost to you and your family can be astronomical. Fortunately, there are programs in place that can significantly help you with your medical expenses so you can focus your energy where it's needed most: on your health and your relationships with loved ones.
What is COBRA?
COBRA (Consolidated Omnibus Budget Reconciliation Act) provides for the continuation of health insurance coverage — for you and other qualifying beneficiaries — when job loss occurs for certain specific events, including "voluntary or involuntary termination of employment for reasons other than gross misconduct."
While the premium paid for COBRA may be greater than what you paid in as an employee, the group rate COBRA guarantees you should make the cost considerably less than if you were to take out an individual health care plan.
While you are eligible to receive coverage under COBRA for up to 18 months after termination, this may be extended to 36 months in the event disability can be proven within the first 60 days of COBRA coverage.
What is Medicare?
Medicare is a federal health insurance program for people:
- Age 65 or older
- Under age 65 with certain disabilities
- All ages with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a kidney transplant)
What does Medicare cover?
- Part A Hospital Insurance for help with inpatient care in hospitals (including critical access hospitals and skilled nursing facilities), hospice care and some health care. No monthly premium should be required for this coverage, as beneficiaries typically have already paid into this program via payroll taxes when previously employed.
- Part B Medical Insurance for help with doctors' services and outpatient care, as well as some other services not covered by hospital insurance. A monthly premium is required for this coverage.
- Prescription Drug Coverage, for which beneficiaries pay a monthly premium.
What is Medicaid?
Medicaid is a financial assistance program for low-income and disabled people, funded by federal, state and local taxes.
What does Medicaid cover?
- Laboratory and X-ray services
- Inpatient hospital services
- Outpatient hospital services
- Health screenings for children and treatment if medical problems are identified
- Comprehensive dental and vision services for children
- Family planning services and supplies
- Long-term care services and supports
- Medical and surgical dental services for adults
- Pediatric and family nurse practitioner services
- Services provided in health clinics
- Nurse-midwife services
- Nursing facility services for adults
- Home health care services for certain people
- Prescription drugs
Medicaid also covers the following for children (and may cover the same for adults, depending on your state):
- Physical, occupational, or speech therapy
- Eye doctor visits, eyeglasses
- Audiology, hearing aids
- Prosthetic devices
- Mental health services
- Respite and other in-home long-term care
- Case management
- Personal care services
- Hospice services
Can I have both Medicare and Medicaid?
Yes, if you qualify, Medicaid can be used to pay for services that are not covered by Medicare.
What is SSDI?
Social Security Disability Insurance (SSDI) supplements the income of those whose physical or mental conditions prevent them from working. Eligibility depends upon the condition being terminal, or projected to last at least 12 months.
What is SSI?
Supplemental Security Income (SSI) is supplemental income for low-income people 65 or older, as well as disabled people based on the same requirements outlined for SSDI.
Can I have both SSDI and SSI benefits?
Yes, this may be possible if you are approved for SSDI, but only for a low monthly payment as a result of minimal work/wages in recent years.
How do I apply for these assistance programs?
- For COBRA, your employer is required by law to provide you with the insurance application paperwork within 30 days of termination.
- For Medicare go to Medicare.gov.
- For Medicaid, go to Medicaid.gov.
- For SSDI, go to SocialSecurity.gov.
- For SSI, go to SSA.gov/ssi.
While you may have countless considerations to be made during this trying time, make it your number one priority to apply for these programs as soon as possible. Ask for the help of a family member or friend to help with the application process, need be. While it may feel too overwhelming to deal with such matters right now, you'll benefit most by taking care of this important business sooner than later.