A study conducted by researchers, including one from the University of Missouri Law School, revealed that a gap in health insurance coverage increases the risk of bankruptcy. Medical bills, health care expenses and other personal living costs have increased for many Americans. Those who have an interruption or gap in their health insurance coverage, however, are two times more likely to file a petition for bankruptcy protection, as reported by MarketWatch.

A lapse in coverage for two years may double an individual’s risk of needing legal protection from his or her creditors. Health insurance included in an employee’s benefits package may also have limitations on the amount of coverage provided for a particular medical treatment. This may have a significant effect on an employee who must then pay out-of-pocket for the expenses his or her health insurance policy does not cover. Reportedly, a survey conducted by the Kaiser Family Foundation discovered that approximately 34% of insured adults surveyed found it either “somewhat” or “very” difficult to pay their deductibles.

Taking the necessary time off to recover

Most employers do not provide sufficient paid time off for an employee to recover from an illness or medical procedure. Understandably, someone could fall behind in fulfilling payment obligations during a period of illness or an unpaid absence from work. Catching up on past due bills, however, is more difficult when the cost of receiving medical treatment only increases an individual’s monthly budget. For this reason, many individuals consider bankruptcy as a means of seeking some relief.

Rising expenses among Americans

A Federal Reserve survey found that nearly 40% of Americans are unable to pay for a $400 emergency. As reported by ABC News, one out of five adults surveyed had unexpected medical bills within the past year. Based on survey results and research studies, it appears that the rising cost of health care may be a significant factor in many individuals turning to bankruptcy for much-needed relief.

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