Drop the word "foreclosure" into almost any conversation and you'll hear something like: "loose lending...irresponsible borrowers...dead real estate market...what do you expect?"
But what you probably won't hear is that one of the biggest causes of losing a home--even today--is medical.
Even now with economy seemingly on its way to hell in a handbasket, a study by Physicians for a National Health program (PNHP) found that big medical problems contribute to half of all home foreclosure filings. Nationwide, medical problems could cause up to 1.5 million Americans to end up in foreclosure each year.
Half of all study subjects (49%) claimed that their foreclosure was caused at least in part by a medical problem, including illness or injuries (32%), unmanageable medical bills (23%), lost work due to a medical problem (27%), or caring for sick family members (14%). In addition, 37% paid more than $2,000 of medical bills out of pocket in one year, 30% lost two or more weeks of work because of injury or illness, and 8% became disabled and unable to work. In addition, 13% used their home equity to pay medical bills. Altogether, about 70% of those studied had medical cause of foreclosure or loss of work due to medical disruptions prior to foreclosure.
The study's findings indicate that there is a lot more going on in most mortgage foreclosures than most people think. It's not just bad loans, bad properties, or bad borrowers. Many mortgage foreclosures are the result of unpredictable medical problems that kill incomes and crush families with expenses.
However, while a specific medical problem probably can't be predicted, it's pretty obvious that most people will experience a serious illness or injury at some point during their earning years. So if you don't have medical insurance now, get some. It's almost more important than a secure job. And if you can't afford it, investigate public programs. Or get catestrophic coverage just for the biggest emergencies. Also look into medical savings accounts (MSAs). Consider your medical coverage when building an emergency fund. While healthcare in this country leaves a lot to be desired, we do need to take care of ourselves as best we can. It's good for our health. And our finances.
3 Responses to "Want to Avoid Foreclosure? Get Medical Insurance"
Wow, they are really connected huh?!
Insurance was really one of the most needed things when you are here in the world, of course they mean a lot and no one can deny that.
It's just a sad reality that no one pay so much attention about its importance.
I just wish that someday there are concern people that will explain to all of us the positive effect of having insurance in our life.
Absolutely right. Insurance needs to be a bigger part of most people's decisions and it's not exactly fun stuff to think about. But it comes up when deciding to work for a particular employer, start a business, invest in rental property, work out the mid-life crisis on a new motorcycle, you name it. Glad everything worked out for you.
From someone who knows this a little bit too well, this is very good advice. We had some medical expenses that we were able to find a solution for, but had they been just a little bit higher we would have been out of luck. We thought we could save a little bit because we're healthy, but that's what insurance is for - the unexpected.