eli5 How people go into bankruptcy from medical debt with things like out of pocket maximums on health insurance. Is it just uninsured that this happens to?
In: Economics
Uninsured, but also people with *very* expensive medical conditions who opt for treatments that may not be covered under their insurance, or while covered, have a high co-pay. There are a LOT of cancer drugs that are insanely expensive, and many health insurances only cover them 80%. My wife’s first cancer drug was $7000 / month (20% copay would be $1400) and her second drug was $12,000 / month (copay would be $2500). You can see how this would add up *very* quickly.
Major medical events usually also often knock you out of work for a significant period of time and can generate non- medical costs. E.g if you’re already living paycheck to paycheck and you get stuck in bed for a month or six, the unemployment check might not be enough to cover your bills. This is why bankruptcy rates after major medical events are similar between the US and Canada.
The biggest reason is that insurance companies try to pay out as little as possible. They won’t necessarily cover every procedure by every doctor in every hospital. And even when they do cover it, that might make you jump through hoops with extra tests and second opinions that you don’t necessarily have time for.
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