Sader Law Firm Blog

Can Setting Up a Health Savings Account Prevent Medical Debt?

Posted on July 25, 2016 by The Sader Law Firm

Last week, we discussed how health insurance plans with high deductibles can cause painful medical bills under the right circumstances. Dave’s story is a reminder of why it is important to plan carefully when selecting your health insurance policy. In fact, Dave’s situation might have been avoided if he had set up a health savings account (HSA). HSAs are used with high-deductible health insurance plans to allow policyholders to save money for future medical costs. The money saved in these accounts is also tax-free and rolls over each year. These accounts do not have ‘spend it or lose it’ rules. If you are healthy, have a health insurance policy with a high deductible (over $1,300 for individual coverage for 2016 plans) and want to save for future medical expenses, you might benefit from using an HSA. Money you put into an HSA can be used for out-of-pocket medical expenses, and…
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Do Income-Based Student Loan Repayment Programs Have Weaknesses?

Posted on July 20, 2016 by The Sader Law Firm

Our blog has discussed income-based student loan repayment programs on several occasions. Income-based repayment plans are helpful, but they are not always perfect. These plans require borrowers to make monthly payments based on a percentage of their discretionary income. A recent New York Times article assessed the weaknesses of America’s income-based repayment plans by comparing them to plans in Australia. The article describes how Australia uses income-based repayment programs to reduce student loan defaults. For example, Australia requires student loan borrowers to start payments only once they begin making $40,000 per year. Student loan borrowers in Australia only pay between 4 and 8 percent of their income towards their higher education debts. Student loan debtors in Australia make mandatory payments, meaning there is a constant accounting of income changes. If an Australian student loan debtor has their hours (and income) reduced, monthly student loan payments decrease. Payments drop right away…
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Is Your Health Insurance Policy Putting You at Risk for Medical Debt?

Posted on July 18, 2016 by The Sader Law Firm

Health insurance policies with high deductibles are causing many people to accumulate excessive medical debt. Unfortunately, health insurance deductibles have increased by 67 percent since 2010. Deductibles are the amount policyholders must pay before their health insurance policies cover medical expenses. When deductibles increase, policyholders may be at risk for accumulating medical debt. More than half of the country cannot cover emergency bills exceeding $1,000. Some health insurance deductibles are now $5,000! We can use a hypothetical scenario to explain why high deductibles can put you at risk for medical debt. How Health Insurance Deductibles Create Unaffordable Medical Bills Dave works at a small business in Kansas City. Like other Americans working at small businesses, Dave has an individual health insurance policy bought through the health care marketplace (or health care exchange). One day, Dave comes down with a severe respiratory infection and seeks treatment at his local hospital. At…
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