Published by Mark

Medical Debt Is Tied To Bankruptcy, But SCHIP Is Coming In

February 20, 2009 at 9:32 am

“This is good, this is good”, Associated Press quoted president O’Bama as saying, referring to the bill he just signed expanding health insurance for children. The State Children’s Health Insurance Program, or SCHIP, now covers approximately 7 million children. The latest bill expands that number by an additional 4 million.

SCHIP was created in the 1990’s to help children in families whose incomes are too high to qualify for Medicaid but who are too poor to afford private medical coverage. The original program was set to expire at the end of March of this year, but will now be continued at least through 2013. The increased cost, government officials say, will be covered through boosting the federal excise tax on cigarettes.

Indiana’s SCHIP program, as is the case in every state, is administered here by state officials, and, as an Indiana bankruptcy lawyer, I take great interest in the subject of medical insurance. Here’s why: Uninsured medical costs are one of the three leading causes of bankruptcy.

One very sad aspect of this fact, as I described in “Medical Debt Can Be Dangerous To Your Health!”, is that medical bankruptcies often involve fairly small amounts of money. The trend of hospitals and doctors turning over delinquent accounts to debt collection agencies is part of the reason for the rash of medical bankruptcies. Then, with the increasing number of job layoffs, many families lose coverage for their children as well as for themselves, and can’t afford to buy COBRA or individually-purchased family coverage. Meanwhile, medical providers, dependent upon insurance company and government reimbursements, are becoming less flexible about dealing with patients who are not covered and who cannot pay.

President O’Bama said the expansion of SCHIP is a key step towards universal health coverage. While this bankruptcy blog is no place to wax political on universal health care, I see the SCHIP expansion as an important resource for many families with children who are suffering financially because a job loss took away their access to health coverage. Many of my Indiana clients who are in the process of filing bankruptcy or who are emerging from bankruptcy will be better able to focus on making a new financial start for themselves and their families, knowing basic medical and dental care are now available.for their children.

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