When Medical Bills Attack
- Written by Daniel Murrell
Medical bills can destroy your finances. I’ll tell you how they almost ruined mine after a motorcycle accident and how I’m fighting my way back.
Medical bills are the number one cause of bankruptcy in the US, the cause of three out of five filings. More than 20% of Americans struggle with medical bills. Injuries are something that can’t always be predicted or avoided. This is the story of what happened to me when I suffered a motorcycle accident.
Before The Accident
I was on an early episode of Listen Money Matters, This Financial Life about a year ago. I detailed my finances and explained how I work for a semester and then go to school for a semester so I don’t have to take out student loans. Of course it takes longer to get a degree, but the trade off of graduating debt free was one I was willing to make.
This Financial Life with Daniel Murrell
Listener Daniel Murrell to analyze his financial situation. He shares a great strategy for making college affordable.
I was 24, my monthly bills were on average $900 and my monthly income was $1300. I had $800 in credit card debt and $3000 left on my auto loan. I also had $500 in my Betterment account and was contributing $50 a month. I had recently achieved my dream of buying a motorcycle.
When you decide to ride a motorcycle, you accept the consequences of that decision and you take the necessary precautions to avoid accidents and injuries. But riding a motorcyle is dangerous and accidents happen for lots of reasons, complacency, lost focus, plain old wrong place at the wrong time. They all converged on me at once.
Even before the accident, my life had taken a turn for the worse. The women I had fallen in love with and expected to marry had left me. We had both been under a lot of stress and it took its toll on the relationship.
I was a complete mess, cursing the world and blaming everything, including myself, for how my life was going. Day in and day out my choices became less deliberate and I did things without focus.
The weekend had finally arrived after a grueling week working full time at Home Depot. My friends and I were supposed to meet at the beach and party all day. I clocked out from work right as the sun came up, said my goodbyes and mounted my motorcycle.
Before you get on a motorcycle you should always check the bike and its driver and that morning I didn’t. This was my first mistake. I forgot to check the rider and make sure I was in the right frame of mind. While I looked capable, I was distracted and ignoring the warning signs that I didn’t have the focus riding a bike requires.
I revved the engine, put my gear on and headed to the freeway. I was in a hurry to shower, nap and begin the weekend. This rush resulted in me traveling 90-100 mph in the carpool lane. It was early so no cars were on the freeway, or so I thought.
About half a mile before my exit, a large truck was blocking the carpool lane so I pulled in the throttle and passed him on the side. This is where my second mistake was made. I was looking for my exit and did not notice that the truck in front of me had a bicycle on the back that was unstable.
By the time I wised up, the bicycle was skidding on the freeway. If I panicked I would topple my motorcycle and surely die. But I could still fix this,or so I thought. I prematurely dodged to the left, hit the divider which caught my jacket, ripping it clean off. After I bounced back onto the freeway, my right foot went straight through the bicycle’s front wheel and pedal.
I felt the impact and immediately looked down and saw my brake lever lodged in my foot, my leg at the hip was unresponsive. I was in shock but I choose to ride my motorcycle the rest of the way home. It wasn’t far and the only person available would not answer his phone this early in the morning. I finally pulled into my apartment complex pouring blood and asked my brother to take me to the hospital.
I had to stay in the hospital for four days. I wasn’t sure what medical insurance I had but was positive my parents had me under their policy since I’m still under 26. I just had to call and get the information.
I spoke to my parents. My eyes widened and my heart sank. They had removed me when I moved out. The hospital administrator gave a somber sigh and asked, “Will you be paying with cash or credit ?” All I could do was lay there in shock.
The hospital sent me a bill that totaled over $43,000. There were other bills that would be sent later, some coming in well over 3 months after the accident.I barely made $10 an hour at my abusive job and it would take years to make $43,000 at that rate.
Don’t Call It A Comeback
It really took a long time before I was able to get my head back on straight. After being released, I made excuse after excuse as to why I didn’t want to organize my bills, never mind address them.
After several friends, including the LMM team, reached out, I finally decided to sit down and see just how bad my situation was. But it was my brother and my girlfriend (yes, we got back together and are very happy) who really came to my rescue.
My girlfriend has been my rock and my brother said something that made me stop and think. He asked me, “Who are you?” after watching me sit on the couch for three months, my foot in a cast, propped on the coffee table, staring at a blank TV screen.
I was lost in doubt and confusion. I was so young but I had already lost so much. I had become a slave to money and didn’t even have anything like a house or a new car to show for it.
So I pulled up my Mint account, looked at my $900 emergency fund and asked, “If this isn’t an emergency what is?” I called my job and had the HR lady help me fill out the disability forms. I wanted to hand deliver it to the state disability office which I was told would make processing faster.
The only problem with disability was that it was calculated 17 months prior to your day of filing which mean I would be receiving 70% of my part time job income, about $450. Just barely enough to pay most of my monthly bills.
Before I left the hospital I tried to find someone else in my position so I hobbled around on my crutches going from room to room asking patient after patient how to pay for this. One patient had the answer.
They referred me to a charity organization that worked specifically with the hospital patients, Charity For Patients. They offer assistance to low income individuals who are crippled by medical debt. I am still on the waiting list to be approved for help.
I also researched bankruptcy and payment plans. While Chapter 7 bankruptcy would erase most of my debt it required me to to give up something of value for them to sell off and I had nothing to give.
Now that my emergency fund was depleted I had to use credit cards to survive. I stupidly panicked and took out a quick loan for $1500 from Avant Credit, an on-line personal lender. This interest rate is 35% which means out of my $70 payment only $22 goes to principal with the rest going to interest.
I should have shopped around for a loan or found a different alternative but I did not. I was scared and honestly did not want the added shame of asking for yet more help.
A Man With A Plan
So where am I now? I’m still waiting to see if I have been accepted into the charitable program. I have chosen to use the snowball method to tackle my debts, paying off the smallest balances and then putting those payments toward the next on the list. All of my bills are automated so I don’t fall even further behind if I forget to pay something.
The biggest thing to remember is when something of this magnitude happens is that you need friends and family. No human is an island it doesn’t matter how smart, rich or sexy you are. In times of need you call your in favors and you lean on the people close to you.
I have created great friendships with people who knew me as the financial guru among our group but I still had debt and had made mistakes. These people pushed and pushed to make sure I got back on my feet, taking me to rehab or work and even simply coming by just to say hello or hangout.
Remember that gaining strength comes from surviving hardship. No matter what you want to do, making a plan is essential and always make sure to Listen, because Money Matters.