Facing a Choice Between Home And Health Care

[question everything]

NOVEMBER 25, 2008

Facing a Choice Between Home And Health Care
Housing Rout Cuts Off Source of Funds to Pay Medical Bills; Chemo, and Then Foreclosure
By SARAH RUBENSTEIN
WSJ


The housing market's collapse is forcing a growing number of Americans sitting on large medical bills to choose between paying the mortgage and paying the doctor. People have long resorted to borrowing against their homes to pay for medical care in times of illness or after an accident. But with home values plummeting and interest rates on adjustable mortgages ratcheting higher, some indebted patients are at risk of losing their homes in order to pay for surgery, cancer treatment, drugs and other big-ticket medical expenses. Other patients are forgoing health care in order to keep from losing their homes. Adding to the pressure is the weak economy, which has lost more than 1.2 million jobs so far this year. For many people, being laid off also means a loss of health insurance. Replacing that coverage on your own can be expensive, or may be difficult to obtain for people with pre-existing health conditions.


John Buckenroth of Bellefontaine, Ohio, had no insurance when he was diagnosed with a brain tumor in 2003. The 54-year-old former security guard qualified for Medicaid, the government insurance program for low-income people, and Medicare, the program for the elderly and disabled, which paid for most of his treatments. But to cover continuing drug costs, the family was forced to refinance their home. Now, Mr. Buckenroth still owes about $20,000 for medical treatments, including an operation that his wife needed. The debt became harder to repay after monthly payments on their new adjustable mortgage reset at a higher interest rate. After falling behind on those payments, the family last week received a foreclosure notice, two days after Mr. Buckenroth started chemotherapy again. "I'm scared to death," Mr. Buckenroth says. "I didn't know I was going to get brain cancer and not be able to work. You never know that."

(snip)

"Health-care costs are creating financial problems that lead to housing problems," says Mark Rukavina, executive director of the Access Project, a Boston-based research and advocacy group on medical debt. A biennial survey last year by the Commonwealth Fund, a nonpartisan research group, found that 41% of about 2,600 working-age adults had fallen behind on medical bills, up from 34% in 2005. Consumer advocates generally urge patients not to refinance a mortgage or use home-equity loans to pay outstanding medical bills because of the risk of losing their homes to foreclosure. In contrast, medical providers typically must obtain a court judgment to put a lien on a patient's home, and they generally still won't get paid until the home is refinanced or sold.

Sometimes patients feel pressured. Kim Carpenter, of North Plainfield, N.J., says several collection agencies have pushed her and her husband to take out a second mortgage to pay off about $60,000 in medical bills from various hospital stays. They have resisted. Ms. Carpenter, a 49-year-old self-employed marketing consultant, says the couple continued adding to their medical debt even after taking out a new insurance policy, which cost nearly $1,000 a month, because it didn't cover pre-existing conditions during the first year it was in effect.

(snip)

Hospitals are often reluctant to take steps that would force patients from their homes, in part out of concern for bad publicity, says Chi Chi Wu, a staff attorney at the National Consumer Law Center. State homestead exemption laws often protect people's homes and a certain amount of the equity in them from being taken by anybody other than home lenders, she says. Hospitals are generally more willing than banks to forgive debts or set low-payment terms. But for people who are having trouble making housing payments because of medical bills, it is sometimes possible to persuade home lenders to modify terms of the loan, especially if you provide adequate documentation of your medical bills, housing advocates say.


(snip)


http://online.wsj.com/article/SB122754689689653489.html (subscription)

[demodonkey]

1. He made a bad decision. He shouldn't have taken a loan he can't repay. He doesn't derserve help...

Yes indeedy. This guy made a bad decision. He should have planned on things he might need, like treatment for brain cancer. Clueless fool! He shouldn't have taken a loan for frills like chemo and operations when he can't repay. Shame on him! He should pull himself up by the bootstraps and get to work. Lazy pig! Let him lose his house. Let him live in the street. Who cares. How dare he expect help, when there are hard working people out there like me, me, meeeeeeee who aren't getting a handout too!!!!


This is all too often what we hear -- not only from Republicans BUT HERE ON DU, TOO -- when it comes to discussion of helping people avoid foreclosure, pay their bills, and get healthcare. It's OK to bail out the corporations and banks, but no, no, no -- nothing for the little guy unless me, me, meeeeee (who did everything right) gets some too.

I can understand the Rethugs thinking this way (until they are the ones who get sick), but to hear it from so-called progressives ON THIS BOARD makes me vomit.

:puke:

[question everything]

2. There are too many stories about people refinancing their homes

to take trips, or even for home improvements, never paying attention to the details. Also about people who should have never purchased their homes at the price and rates that they did.

When we first moved to California, in 1993, and faced a "sticker shock" of housing prices, we were intrigued by a 4% introductory offer for mortgage. Those days, the average rate was 7-8%, I think. And a friend told me that to get those mortgages one had to qualify for a 7% fixed.

And this is what should have been done in 2005 and 2006. Lenders and mortgage brokers should have warned people about teaser rates.

Now, this person, above, probably had no choice. He had to refinance and the only terms offered to him were that 2 yr teaser rate.

The problems is also was with people who purchased home for which they should not have qualified with nothing down. Thus, when things got bad, they just walked away, having no equity to begin with, living almost rent free, enjoying the tax benefits of owning a home.

Still, as much as I don't think these people deserve help, the reality is that we all suffer. When whole blocks are empty - in the inner cities, not only in the suburbs - subjected to vandalism, we all suffer. Same with the auto industry. Having 3 million out of a job, having more people needing help from the government with dwindling resources, is bad for all of us.

[quidam56]

3. Profit Care comes way ahead of Patient Care

See what is called 'horrifying ' but is defended in East Tennessee as quite acceptable standard of health care. http://www.wisecountyissues.com

[mackerel]

4. Renegotiating your home mortgage

Thought I would share this with everyone given the current market conditions on real estate. For those of you who purchased your home at the peak of the market, there is hope in negotiating your mortgage to current market value to prevent foreclosure.

The program is called HOPE and it is an alliance between lenders and FHA (HUD); HOWEVER your lender has to be a participating member. Even if your lender doesn't show up on the list of approved lenders, go directly to your lenders website for more current information of their status.

Here is the link: http://www.hopenow.com/

Hope this helps some of you.

[area51]

5. This is why ...

... we need single-payer. Bankruptcy due to healthcare costs is unheard of in first-world, civilized countries.