Medical bills

[mike59]

Hello to all,

My wife has been disabled since 2001 and applied for SSDI (which she has) but never signed up for Medicare because was covered by my employer's health insurance. My employer's health insurance has been paying all her medical since 2003 and never brought this up before. We didn't know she was even eligible for Medicare.

Now the insurance company is not paying her claims, except for 20%. The medical bills will be huge and I have since lost the job and am sick myself. I can't work and collect SSDI as well.

We own a home, two cars, have about 80k in the bank and that's it. I am afraid we will have to declare bankruptcy and lose everything. If we can't keep our cash we would not be able to afford the home.

I might by jumping the gun but want to learn what we can do.

Any advice would be appreciated.

Thanks,
Mike

[lrprn]

First, I'm so sorry to hear about all the health struggles you and your wife have been going through. The first thing for you to do is to get your wife on Medicare, and also find out if you now qualify as well. It won't help what's already happened, but it can help a great deal moving forward.

If you are considering filing bankruptcy, the biggest issue you two are facing is that you have $80K in cash. If you would file, SSDI is protected and cannot be taken by the bankruptcy trustee. However, any funds that are *not* SSDI in your account(s) and cannot be protected by your state's bankruptcy exemptions can be taken to pay your creditors.

If you haven't yet, set up a specific account that includes ONLY your SSDI payments so it's clear that only SSDI funds are in that account. Transfer every dollar that you can prove with documentation came from SSDI into that account as well. If you have your SSDI payments auto-deposited, move those into this account as well. This will help protect it better if you do file bankruptcy, or if any of your creditors take you to court to get payment that way.

Your and your wife's medical bills are unsecured debts, so the ones for care provided before you file can be wiped out. However, if yours and her medical bills are ongoing, then any care after filing will need to be paid for in full. That's why getting on Medicaid asap is important.

You didn't share if your house and cars have loans involved or if one or both are paid off in full. Also it would help to know which state you live in, how much money from all sources outside your SSDI both of you made over the last six months, if you own properties besides your house and two cars, and if you have anyone else living with you currently. If you share a littlel more information, we can help you sort things out better.

You have a more complex case, so you aren't a good candidate to file a bankruptcy on your own. (And with $80K, you can afford to pay for a good lawyer to protect your interests )

Since you can see what's coming, now is the time to set up free or low-cost initial consultations with 3-4 experienced bankruptcy lawyers in your area. That's the best way to find out what the best options are in your very difficult situation.

Keep asking questions here - we'll help you as best we can.

[mike59]

Thanks for the kind words. The health stuff is bad enough but then something like this coming down the road is almost too much. My wife needs future medical treatments and so do I and if we lose the 80k that will severly impact our ability to pay for those treatments.

Would "they" take that 80K away from us?

We've has no income aside from SSDI payments in the last six months aside from LTD (long term disability) from my old job.

One car is paid for, one we owe 3k on. The home we owe about 100k on and paid 170k for.

I live in Wisconsin. I won't be eligible for Medicare until 2010 and will be automatically enrolled. My wife can't sign up for Medicare until January 2010.

Yes, it is a complicated situation and I don't fully understand the health insurance aspect. How can the insurance company go back to 2003 and attempt to change things? We were never told or we would not have gotten ourselves into this situation. We could have done something else.

I really appreciate your insight. I am a bit beyond myself at the moment and my wife is in a state of shock. The medical bills would probably total over 200k.

Would they sell our cars?

I know I need to talk to an attorney and will speak to several.

Thank you again and take care.

[mike59]

Also, we own a duplex (my mom lives upstairs) and that is the only property we have. We live downstairs with our children (24 and 22).

[justplaintired]

It sounds like your wife would qualify for Medicare if she has been on disability for 2 yrs, you on the other hand will not qualify until you have been on it that long also. So many who are on disability do not realize that once you start receiving disability, you are responsible for your own health care for the 1st 2 yrs. And it appears with that amount of savings, you could have afforded to pay a private insurance bill. Too bad someone didn't inform you of that. I would think the SS office should have told you of your options and that you would not be covered under Medicare until that time. Although private insurance is not cheap, it would have saved you from having large medical bills.

Now your SSDI is protected, but none of your assets, other then what your state allows. To either BK or debt collectors, so in other words, they have a right to your savings along with your other assets. I am in total agreement that you need a good lawyer.

I would first find a way to insure yourself and your wife, go to SSDI office right away, get her on Medicare, you research what options you have. That savings will cover insurance for both of you, primary for you, secondary for your wife. Unfornately it will not go back and take care of past bills, other then I believe 3 months past. I am a little confused why she can not go in til Jan. If it has been over 2 years on disability, why are they asking her to wait? Even a state funded option may not cover you with such a large amount of assets. Many people on state funded programs have nothing, so they qualify for those programs and even for them, it isn't easy to get medical coverage. You appear to have a good amount of assets which means, they will not look at you in the same light.

Now I know of some instances with hospitals and doctors will write off some bills, when the circumstance are like yours. Have your tried talking to anyone about that? If your incomes is small and the bills are high, perhaps they will work with you? It's worth a shot, both of you being on disability might sway them a little. Not encouraging begging, but honestly it won't hurt to try. I work in the health care system and work with insurances and know how bad it really is for some people, so try anything you can to get them to accept less. With you income being safe, it might require the use of some savings, but it beats filing BK and having them take it anyway.

One other thing, if your insurance did not notify they would be dropping your coverage, you may have a way to go back on them. They can not just drop your coverage with no notifaction of some sort. You have certain rights, so try to figure out what is going on. Your employer has to have given you something in writing on a change in your policy. Find out why you weren't notified.

Good luck and again, get the insurance coverage figured out, even if you have to pay out of pocket for coverage, which you will, it beats having huge medical bills eat away your savings.

[mike59]

No, no one notified us they were dropping coverage and coverage on my wife hasn't been dropped. The insurance company is just saying that Medicare is the primary and the insurance is the secondary. There was no notification ever.

We've always paid our way. I got sick and was unable to work, my wife too so then come the bills. I went down to half pay and it has been hard to keep our heads above water but we have so far, until this.

[mike59]

Are you saying all the SSDI payments my wife, or I, received would be protected? In other words, we can say we've lived off of my former income/savings and saved the SSDI monies? I am in fear of losing the 80k meaning we would lose our home because we would not be able to pay the property taxes etc.

My wife's SSDI payments would total nearly 80k over the period she's been on disability.

I wish I could just sell the home but know that's not realistic.

[jribe]

hello mike,
i thought i would quickly respond to this; hopefully my point was not already mentioned.

For starters- the trustee would GLADLY take the $80k - that's a lot of money to pay creditors with!

However, if your only income is SSI- why even file? That is exempt for garnishment so essentially there is nothing they could do.

Move the 80k somewhere safe; ie IRA account or the like- even a fixed annuity that you can draw 10% from a year - these accounts are also exempt for being garnished.

What debt besides the medical bills are you trying to eliminate?

If those are all; doesn't sounds like BK is really for you.

If you go the BK route- you need to get the 80k into a safe asset. You'll want to consult an attorney for this; and keep in mind that you may have to wait 6 months to a year to file after moving the assets to avoid other problems from the trustee..

Hello to all,

My wife has been disabled since 2001 and applied for SSDI (which she has) but never signed up for Medicare because was covered by my employer's health insurance. My employer's health insurance has been paying all her medical since 2003 and never brought this up before. We didn't know she was even eligible for Medicare.

Now the insurance company is not paying her claims, except for 20%. The medical bills will be huge and I have since lost the job and am sick myself. I can't work and collect SSDI as well.

We own a home, two cars, have about 80k in the bank and that's it. I am afraid we will have to declare bankruptcy and lose everything. If we can't keep our cash we would not be able to afford the home.

I might by jumping the gun but want to learn what we can do.

Any advice would be appreciated.

Thanks,
Mike

[justplaintired]

Are you saying all the SSDI payments my wife, or I, received would be protected? In other words, we can say we've lived off of my former income/savings and saved the SSDI monies? I am in fear of losing the 80k meaning we would lose our home because we would not be able to pay the property taxes etc.

My wife's SSDI payments would total nearly 80k over the period she's been on disability.

I wish I could just sell the home but know that's not realistic.

Well that is a good question. You saved that from her disability? You really need a good attorney. I am just unsure on that one. Did she receive a lump sum in that amount and can you prove that? I know some people fight forever for SSDI and then will receive a lump sum payment.

It is such a shame when this happens to people. The ball was dropped on you and your wife big time. Someone should have informed you about the Medicare option. I personally think your insurance company should have given you a heads up that your coverage would be changing and it's a real shame that this should never have happened to you.

[mike59]

Yes, she received a lump sum and so did I. Our bank records could verify that. Those two amounts would probably total somewhere in the neighborhood of 35-40k (for the lump sums alone). She has been receiving around $700-800 per month in SSDI payments since 2003. My income over those years was around 66-70k per year.

[mike59]

hello mike,
i thought i would quickly respond to this; hopefully my point was not already mentioned.

For starters- the trustee would GLADLY take the $80k - that's a lot of money to pay creditors with!

However, if your only income is SSI- why even file? That is exempt for garnishment so essentially there is nothing they could do.

Move the 80k somewhere safe; ie IRA account or the like- even a fixed annuity that you can draw 10% from a year - these accounts are also exempt for being garnished.

What debt besides the medical bills are you trying to eliminate?

If those are all; doesn't sounds like BK is really for you.

If you go the BK route- you need to get the 80k into a safe asset. You'll want to consult an attorney for this; and keep in mind that you may have to wait 6 months to a year to file after moving the assets to avoid other problems from the trustee..

Thanks!

Yes, we're only concerned about the medical bills. Other bills we have covered on half pay over the time I've been disabled.

Wouldn't transferring that money into an IRA be looked at as a fraudulent transfer? I don't want to get into a deeper hole that I am already in.

[jribe]

Thanks!

Yes, we're only concerned about the medical bills. Other bills we have covered on half pay over the time I've been disabled.

Wouldn't transferring that money into an IRA be looked at as a fraudulent transfer? I don't want to get into a deeper hole that I am already in.

that's why you'd need to consult with an attorney; but if you wait 6-12 months you'd be fine in doing that. They have to prove you had intent to defraud and file BK.

But basically because your income is garnishment proof- while file? They can get judgements against you - but there's really nothing they can get at.

Again- just consult with an attorney; but it sounds like you don't need to file; unless you want to

[mike59]

Hi,

Thanks for all the replies.

If we don't file bankruptcy couldn't they put a lien on the house? Our cars?

Say I recover from my illness and go back to work wouldn't any judgment be applied to future wages?

Best,
Mike

[lovebirds]

Oh dear Mike. I'm so sorry to hear about this. I think you need to consult with an insurance lawyer and bankruptcy lawyer to weigh out your options. If anything, find some safe way to remove the $80k. Are you using it to supplement your dropped income?

If you do decide to declare bankruptcy, do not lose that cash. Pay off part of your mortgage, pay taxes ahead of time, pre-pay insurance policies in advanced, buy bulk groceries, do car repairs, pay off student loans, anything you can do to avoid losing it!

[mike59]

Hi lovebirds,

Thanks for the nice thoughts and advice. I really appreciate it.

People have been really helpful here.

I think you need to consult with an insurance lawyer and bankruptcy lawyer to weigh out your options. If anything, find some safe way to remove the $80k. Are you using it to supplement your dropped income?

We're talking to several attorneys today. I'm trying to figure out where we are at and one of the unknowns is will the health insurance company actually go back to 2003 and attempt to collect on it? Sort of hard to find out.

Yes, we're dipping into savings because the cost of the mortgage, insurance, medical bills, etc. is more than the small income we now have. If I get better I can return to work but right now that isn't a possibility.

Best,
Mike