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Written by admin on April 24th, 2010

The Consumer and the Hospital Bill

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The Arizona Daily Star first did a story on Mark Bonacorso last July. He had an emergency appendectomy and the medical expenses totaled almost $29,000. Mr. Bonacorso had no health insurance at the time and he had hoped the hospital would forgive much of the debt since the surgery was for emergency purposes.

That was not the way things worked out. He recently was contacted by a collection agency representing the hospital where he had his surgery. The bill had been reviewed and some charges reduced, but there is still $23,000 owed, and the hospital wants its money.

This is a situation many Americans have found themselves in as they deal with unemployment and the associated loss of health insurance in many cases. It is one of those situations difficult to deal with because the hospital provided services in good faith and probably saved Bonacorso’s life. But Bonacorso cannot pay his hospital bill and now faces losing his home.

In Bonacorso’s situation though there is another fact to consider. He is a small business owner and the reason he does not have insurance is because he cannot afford it. The recession has been hard on large corporations but even harder on the small businesses struggling to keep their doors open as consumers pull back spending. Bonacorso owns a marketing and public relations firm. He had to lay off both of his employees and has run up debt trying to hang on to his house and business.

The choices facing Bonacorso are not good. He can file personal bankruptcy or he can try to sell his home. Actually he has a third choice. He can walk away from his home so that he can eliminate the mortgage payment and either choice does not make him happy.

Bonacorso did recently buy health insurance from Humana. The plan has a $2,500 deductible. Unfortunately this doesn’t help him pay his current hospital bill. He is trying to work with the collection agency to find a resolution. He is also hoping the economy picks up soon but that could take a while.

Even if Bonacorso decided to sell him home, it might not help him. Some of his neighbors have been trying to sell their homes for two years now. Home prices have fallen and many consumers find themselves living in underwater homes. An underwater home is one that has a mortgage balance that is higher than the market value. It makes it very difficult, if not almost impossible, to sell.

The Obama administration has been trying to encourage banks to help consumers in underwater homes. Banks would have to write off part of their loans to bring the mortgages into line with market prices. They are unwilling to do so without government funding.

So all Mr. Bonacorso can do is hope the hospital will work with him to establish a reasonable payment schedule and maybe write off more charges. In the meantime he just worries about what the future holds for him just like millions of other consumers.

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