What to Do When You Can’t Possibly Prepare Enough

Ellen writes in with a very difficult story:

I am a huge fan of yours and have used much of your advice to simplify the money matters in my family, but my family is currently in a crisis that I have never seen discussed on your site.

In early April, my family was in a severe car accident. We were driving my mother’s van at the time and we were t-boned by a hit & run driver. My children’s car seats protected them from any damage and I walked away with only some muscle strain, but my husband was not so lucky. He had to be transported to a local hospital via ambulance due to a severe flexion neck injury.

Let me take a minute to review our household’s current standings: My husband works 40-hours a week in a fairly physical job. I work 32-hours a week. We work alternating schedules so that we do not need daycare for our two children. All of our benefits come out of his pay check because he gets a better benefit rate as a full-time employee. We had 6 months worth of savings for living expenses.

My husband has been out on FMLA ever since and will be until at least early July, when the doctor will decide whether he can return to work or needs to find a new line of work. Our FMLA expires at that point and the hospital that he works for will probably help him find another position, but we are currently unsure what that might be or if he will be able to continue working the convenient hours he is working now.

In the meantime, because we were the victims of a hit & run, the vehicle insurance is going to pay out to the uninsured motorist limits. And that’s the part that’s difficult. See, since uninsured motorist is a “final pay” settlement, we can’t get any help financially until Aaron is back to work. Normally, under the rights of subrogation, your health care will pay out, then place a lien against the settlement.

Unfortunately, though we work for a health care provider, our insurance will not pay out. At the 30-day mark of his accident, I had to pay the hospital bill, which wiped out a good bit of savings. Since this bill was to our employer, we could not afford to let it languish. The same is true of the ambulance bill. Also, his doctor bills. I have to pay enough to keep them out of collections (I’ve worked too hard on our credit to let that happen) and enough to keep the office letting him see the doctor.

We’ve been scraping by, but it’s a close thing. My husband has now exhausted his sick leave, but the lion’s share of the bills are paid. We figured that with his short term disability (which we pay for with our benefits), we would get by. Unfortunately, his short term disability claim has been denied. Since there is no subrogation clause in our short term disability policy, they won’t pay out in the case of 3rd party causation of the time off work. This was not something that even our HR Benefits people were aware of. (Obviously, this is an employer subsidized plan with an outside company, unlike our health insurance.)

Now, we are a month away from my husband returning to work, and my income is not enough. The catastrophic string of events that are unfolding just keep rolling in at us. I have applied for a credit card (we currently don’t have any, except one very small emergency card) to start putting some living expenses on and I will unashamedly run it up and pay it off when the settlement comes. The only things we have to pay now are rent, gas, food, and our vehicle insurance.

So, the obvious question is, knowing that I had stocked a huge amount of savings in the past few months and couldn’t really cut any closer to the bone, what did we do wrong? Honestly, if my husband had simply lost his job or quit, we would be in much better financial shape than we are now. What would you have done differently? We thought we did everything right.

Here’s the thing – you did do everything right. You were more financially prepared for this than the vast majority of Americans are.

This episode teaches a hard truth: there is no social safety net for when things like this happens. The only safety net we have is the one we build for ourselves.

What Should Ellen Do?

Given their situation, the best short-term thing to do is probably to rack up some debt. However, I wouldn’t be sure that a credit card would be the best choice here. If I were you, I would visit a credit union and look at more options than just carrying a balance on a credit card, which will bleed you with interest.

In some situations (people with great credit, for example), credit unions will extend personal loans which usually carry a much lower interest rate than a credit card. Also, if you have any form of collateral on the loan, you might be able to get a significantly larger loan. None of this is a guarantee, but it is an avenue worth following.

The painful truth of the matter is that you’re sitting on the lip of a whirlpool. This whirlpool often drags people into a downward spiral towards medical bankruptcy. Sometimes, if things turn out well, you can escape the pool, but you’ve reached a point where most of the events necessary for that are out of your hands. Just keep your spending low, rack up as little debt as possible, and wait.

Some Thoughts on Preparation

Ellen’s story is a painful one, but stories like this happen constantly all over the world. People are happily living their normal lives, then they get into an auto accident or find out that they have a serious disease – and their happy normal life is derailed.

We don’t like to think about these things.

It’s much more pleasant to think about a future that is brighter than our current life. In fact, it’s that bright future that often motivates us to work hard – it’s our psychological carrot. We work hard for that great new home. We work hard to make sure our kids can go to a wonderful college. We work hard for that great vacation in a few years.

The truth is that these things happen to everyone – and we rarely know in advance that they’re going to happen. The less prepared we are, the closer we are to the “whirlpool” that I mentioned above, and that downward spiral often leads to bankruptcy and effectively starting over.

What can you do to prepare yourself?

An emergency fund

Cash is king. Yes, there are lots of guidelines for how big your emergency fund should be (I use the rule of thumb of two months of family living expenses for each dependent), but giant emergencies like these often eat through that like it’s nothing. As a family, we’ve moved to an “endless” emergency fund. I just contribute to it automatically each month and don’t even look at the balance. I know that there’s plenty there for a crisis of any kind.

Financial preparedness documents

Know every account that you have and have the account information in a place where it can easily be found. Yes, I wrote about financial preparedness documents before, but having one ready is truly vital. Create one, put it in a safe place, and update it regularly.

Long term care and long term disability insurance

What happens if you can no longer work at your current career? What if you need managed care for a long period of time? That’s what these types of insurance are for. Yes, not everyone can afford them, but if you can easily afford them, it’s a good place to put your money. It protects your family not from your death, but from your long-term incapacitance.

Assets that retain their value

A flat panel television doesn’t retain its value. A PSA-certified Babe Ruth baseball card does. A video game console doesn’t retain its value. Gold bullion does. When you’re looking to buy something for personal enjoyment, ask yourself whether it retains value and put some premium on the things that do.

Transferable skills

What happens if you’re no longer physically able to conduct your current career? You’ll have to move on to another one. Do you have any skills that might help you find another one – especially skills that help you with the career you have now? If you don’t, you might want to start working on them. Public speaking, information management skills, time management skills, communication skills – these are all vital in almost every field.

Remember, the more prepared you are for an accident, the better off you’ll be if/when it happens.

Even better, seek out ways to prepare for that situation while improving your current one.

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  1. Chase says:

    This is, at the same time, a heartbreaking and inspirational story. You’re definitely right, she did do everything right. What a testament to the truth of what it’s like when you’ve done all you can to prepare, and yet things still happen. What would happen in the “average” American household under these circumstances?

  2. Kelly says:

    @Ellen, I am so sorry for your predicament. It certainly doesn’t seem fair…not at all.

    I’m surprised that the hospital wouldn’t permit a payment plan and that you had to pay the bill in full. Most hospitals, so long as you talk to them and explain your predicament, will allow you to make payments so you don’t exhaust all of your savings. I had surgery last year and still owed well over 3K after my insurance paid it’s portion, I don’t have a savings so was able to contact the hospital’s billing dept and made arrangements to make payments to them for the balance due. It has since been paid off since we received our tax refund in March.

    Is there any way you can qualify for food stamps until your husband can return to work?

  3. brad says:

    ditto on the payment plan. and for the “i’m surprised that the hospital wouldn’t permit a payment plan”, im assuming that’s your nice way of addressing the situation, since it doesnt say she tried to work one out:) ellen must have meant the bill was simply due after 30 days so she paid the full amount. although to make matters easier during negotiation i wouldnt have informed them of the lump sum. i wouldve just taken the bill to the billing area and sat down with someone face to face to say “look, i have every intention of paying this bill, but it will have to be in installments of $x as i make $y a month.” another alternative woulve been to negotiate a smaller lump sum. “look, is there any way you would accept a cash lump sum now for 50% of the total?” best case you save 50%, worst case they say no, most likely case, they counter with another lump sum that is higher but in the end you still save money.

  4. Perry says:

    Ellen,
    As Trent said, you did do everything right. Just think how bad things would be now if you hadn’t stocked a huge amount of savings before this happened.

  5. Michelle says:

    Talk to a lawyer, STAT! There is no indication that she has talked to a lawyer at all. This is the kind of situation where she could get a lot of great advice from a personal injury lawyer (normally they…well, we) do not charge for a consultation on something like this. There might be a lot to lose if she signs her name to anything.

  6. L says:

    I’m so sorry this happened to you and your family, Ellen. You really did everything right.
    Have you consulted a lawyer yet? They might be able to go over your insurance policy, your husband’s short term disability policy, to find some relief? Also: it won’t help Ellen, but it sound like since her kids were in car seats that this is a fairly young family. Trent, your readers should know that at a young age you are more likely, statistically speaking, to become disabled than to die. Thus it is CRITICAL to get a GOOD short AND long-term disability insurance policy, in some ways even more critical than life insurance.
    And Trent, I can’t believe you’re advising them to buy gold! I thought I read a while ago that that wasn’t a good idea? Sure, it’s around $1100/troy ounce now, but who knows where it’ll be 5/10/20 years from now. It could be back where it used to be 10 years ago at $350. It’s too volatile. I never figured you for a gold bug, Trent. Not for people in this posiion.

  7. JK says:

    Here are some suggestions off the top of my head:

    1. if your husband is at home recouperating 24/7 can you pick up extra hours even for the short term? If not, can you pick up an extra part time job. With him home you still won’t have daycare expenses.
    2. ditch your pride and ask for help. Do you have a local food bank? Let everyone you know you’ll happily accept any over abundance coming out of their gardens – offer to help weed and water in return. If you have a yard plant a garden. A little money for plants/seeds may cut your grocery bill considerably over the summer.
    3. Sell your extra stuff – have a garage sale, post items on ebay or Craigslist. Turn your unwanted items into cash.
    4. Gather up all the clothing your kids have outgrown and either sell them at the garage sale, or arrange a swap with other parents to get what they do need. No need to spend a cent if you don’t have to and it clears out the closets.

    It sounds like you’ve been the models of fiscal responsibility up until now and this situation isn’t one of your own making. I’ll bet people would be happy to help. Some may not know how much trouble you are in, or they know but don’t want to offer help and risk offending you.

  8. Dave says:

    Ellen,
    I assume you are not in a no-fault insurance state, because then you would be covered regardless of who was at fault in the accident. However, given your predicament, I would check no-fault laws in your state.

    Also, liability coverage should cover any damage to your husband beyond his hospital bills. Unfortunately, most people don’t carry enough and you might be limited at $50,000 or $100,000, but I’m sure that amount would help.

  9. Katy says:

    Ellen – has your husband applied for SSDI from Social Security? It sounds like he would qualify for benefits, potentially along with your children. While the paperwork could take some time to go through, I think you get payments retroactively from the date of application. Call up the nearest Social Security office or a local CWIC (formerly at BPOAs). They can help with navigating the system and also with issues related to going back to work. If he has Impairment Related Work Expenses, he may be able to keep his disability check even longer.

  10. Stephan says:

    im with you L, i wouldnt be investing in gold when its at a high like it is now. but besides thats, obvisouly this is a terrible situation for your family, and although things seem horrible currently, you will get through this because you WERE prepared for something like this. dont let these events in life change your habbits, youved one everything right so far, keep at it!
    Preferred Financial Services

  11. Thanks for talking about assets that retain their value. That is what Gold does.

    I remember reading Rich Dad, Poor Dad and learning about what the difference is between an asset and a liability.

    Assets generate income or cash. Liabilities consume cash.

    Aquire Assets not liabilities. Your house can be a liability. Interesting stuff.

    Thanks for the article.

  12. chacha1 says:

    Um, Trent was not advising *Ellen* – or anyone else – to buy gold. He said pretty clearly that gold was only one example of a discretionary purchase that will typically hold value, as opposed to immediately depreciating like electronic toys.

    His point was that as we prepare for emergencies we think beyond the basic savings fund and put in place the insurances so many people “forget” about, plus hard assets that can be sold if there’s a cash-flow crisis.

    Back to the post: I’m kind of shocked that the household’s employer did not, apparently, even suggest workarounds for the payment situations. It’s not at all surprising, though, that HR had incomplete information.

    Another good reason people need to educate themselves about their own benefits. It’s not much of a benefit if you can’t use it when you need it.

  13. Brigid says:

    I work for the mayor of a small city, and we have an emergency fund to help residents in situations just like this. Had Ellen come to me, I would have worked with other charitable agencies to come up with funds to help pay her rent and bills, and I would have referred her to a social worker who might have advised her to negotiate her hospital bill. I also have a handly resource sheet with information about local food pantries, subsidized housing, fuel assistance, even a housing lawyer who works pro bono.

    There is only so much you can do for yourself. No one wants to ask for help, but sometimes it is the most responsible thing to do for yourself and your family. Better that than becoming malnourished, being evicted, or plunging deeper into debt.

    People give to charities like mine precisely because they want to help people like Ellen, and if no one asks for help, their money would go to waste. We all have the reponsibility to help one another, and to ask for help when we need it, because no matter how much we would like to think otherwise, no one can go it totally alone.

  14. Tamara says:

    just another story that shows the benefit of universal health care. Living in Canada, when I hear these stories I am continually amazed at the expense to see a doctor. Here it’s covered.

  15. valleycat1 says:

    Re the FMLA running out – my employer allows other employees to donate a portion of their unused time (sick leave or vacation time) to people who have used up all their time due to something catastrophic like this – you might want to check with HR at your husband’s employer.

    You could also check with some of the local service clubs (rotary, lions, etc.) and/or your church to see if they have any assistance available or could put you in touch with a group that could help out.

    I hope your husband’s recovery goes well & that he’s able to get back to work sooner rather than later.

  16. marta says:

    @Tamara (#11): Agreed. As an European, I am constantly horrified at stories such as Ellen’s.

    Even so, someone is bound to show up here (or wherever HC is mentioned) and say that universal HC sucks, it will make things worse for *them* and so on.

    Ellen, I wish your husband a speedy recovery and I hope everything will turn out fine. This is not your fault whatsoever.

  17. Tammy says:

    I think she should definitely contest the short term disability decision. When my dad became disabled, my mom had to apply three times before they were approved. Some insurers have ‘no’ as their default answer and you just have to keep trying.

    Many {{huggs}}. Hang in there, it’ll get better.

  18. Ariella says:

    Something seems off about Ellen’s legal analysis here. In most states, if liability is 100% on the other driver, then the uninsured or underinsured insurance carrier has to pay the medical bills as they come in. So this sounds to me like there’s some argument for her husband’s contributory negligence in causing the accident.

    In addition, because Ellen is negotiating with her own insurance company, that company has a duty of good faith and fair dealing. Perhaps Ellen should get in touch with an attorney who can help her in reaching a fair settlement with the insurance company. Many people do not know their rights with respect to uninsured and underinsured motorist claims, and although lawyers are vilified as “greedy,” they generally know the true value of such a claim.

  19. Karen says:

    She needs to get a good attorney asap. There’s no reason she and her family should be suffering like this. I’m not a fan of attorneys, but the right one in a bad situation can be a Godsend.

    GL, Ellen.

  20. Nancy says:

    Some additional thoughts for Ellen: you mentioned the accident occurred in your mother’s van. Have you looked at whether you have TWO auto insurance policies potentially in play here: your own and your mother’s policy. Sometimes you can get the companies to pool or stack the UM coverage when the limits of each are are exhausted. It’s worth making sure you have made claims under all applicable policies. Also, I don’t understand why the UM portion of the auto policy will not pay out immediately if your bills are already equal to or above the UM policy limits. There’s no requirement your husband return to work to receive the UM portion. Make a demand on the insurer for the total amount of the UM policy limits now. If the limits are low enough and the injury serious enough, he should just demand the full UM policy limits (for example, if the UM limit is $15k and you’ve already got 10k in bills, it is not unreasonable to demand the whole 15k). Many states/ policies also have a separate “med-pay” provision that pays for medical bills up to $5k or so immediately. I am also dubious about the grounds for denial of the short term disability policy. If they will only pay when they can get reimbursed from a third party, they are not providing insurance. Ellen seems to be getting the run around from both insurers, and as other said, she probably should consult an exerienced personal injury attorney or insurance coverage attorney who can assist her family. Time is of the essence here to dispute denied claims and a good attorney will not charge you for an initial consult of up to one hour. Call your local county or state bar association for a referral. If you live in a state that has an insurance commission, you can make complaints to that agency and the insurance company may reverse its denial when copied on the complaint. But most disability policies have a limited appeal time period after denial so it’s really important to appeal timely, usually just by sending a letter to the appeal address specified in the policy. And also check to see whether either you or your huband have an EAP program at work that may also provide additional assistance for you or our husband. Finally, your local United Way may have additional programs or affiliated agencies to help you temporarily. Good luck to you and your family.

  21. cynthia says:

    Please consider contacting your City Council person or township office. They should be able to provide you with information on how to access the many social services that your area provides. Most people do not know about these services, but I hope that they are there in your community. Good luck.

  22. MP says:

    I’m utterly shocked someone who is insured can’t get the insurance company to pay up. As a Canadian I just can’t fathom it. Really, more people go bankrupt in the US because of health care costs, uninsured procedures, insurance companies that nickel and dime people, won’t pay up for things policies clearly cover, kick people off insurance when they, gasp, get ill…No amount of preparation or saving in your lifetime, will ever cover a serious medical issue.

  23. Kevin WIlson says:

    Trent said:
    >Ellen’s story is a painful one, but stories like
    >this happen constantly all over the world.
    >People are happily living their normal lives,
    >then they get into an auto accident or find out
    >that they have a serious disease – and their
    >happy normal life is derailed.

    All over the world? The medical/health side of these stories indeed happens everywhere, of course, but the financial side seems to be uniquely American.

  24. Doug Warshauer says:

    The unfortunate answer, as many above commentors have stated, to Ellen’s question: “What would you have done differently? We thought we did everything right” is that she did do everything right, and she is still where she is. You cannot protect yourself against every possible eventuality. You can minimize risks, but you can’t eliminate them. Understanding that is valuable, because the she should not compound her problems by feeling bad about not being adequately prepared for a string of extraordinarily bad luck.

  25. Ryan says:

    Stories like this remind me why I’m so anxious to get a passport and explore the rest of the world.

  26. Charles Cohn says:

    This story points up the importance of having uninsured motorist coverage in your car insurance. I carry the maximum.

  27. deRuiter says:

    Dear Tamara in Canada, Check with your local news media or hospital PR person, the Canadian system is 1. going broke, 2. about to further cut (that means ration) benefits to those requiring healthcare, and 3. unable to provide health care in a timely manner to citizens, hence the enormous traffic over the border of Canadians seeking immediate health care and operations in the United States where there is little waiting for desperately needed care.

  28. deRuiter says:

    #22 Charles is correct, you also need UNDERINSURED motorist coverage, and get a whacking big payout amount even if you have to pay more premium. I’d go on the local news with a description of the vehicle which did this to you, the hit and run vehicle, any clues the police have like paint chips, glass, etc., and the story of the destruction of your family. Someone knows who this character is, and dislikes him/her, and will turn them in. You can collect on their insurance unless it is an illegal alien driver with no insurance in which case our ICE will tell him he’s a bad, bad boy and let him go as illegals are a protected class. But you might luck up and it’s an American citizen and you can put a claim on his insurance.

  29. Now that was a real eye opener.

    I really wish the author and her family the best

  30. Ana says:

    Derioter: my father just had prostate cancer. He had thecwhole operation, consultations post-care, everything taking care off in a timely manner and we didn’t pay a cent. Also my childs care, eyes and medical also easy access and professional. Right in the middle of Toronto. Our system might no longer be luxurious but is working well.

  31. megan says:

    Regarding the medical bills: it is very important to note that hospitals will almost always work with you on a payment plan. They do this all the time and often will write off part or all of the balance if you provide them with your current situation.

    Several years ago , when my doctors sent me for an MRI looking for a tumor, I received a $3000 bill. I called the hospital and was asked to send in my current financial information. Although I was looking for a payment plan, they called me back saying they had already adjusted my balance to 0. For those in poor financial situations at that moment, the hospital’s collections staff are typically very understanding when they don’t have to hunt you down for payment.

  32. getagrip says:

    I echo those that say it’s time to ask for help from others in the community and to keep applying for the insurance issues and start taking it up the chain. Yes they have policies in place, but at the end of the day they are people too and if they see you aren’t trying to work the system so much as trying to get what you should be getting they may find a means for an exception.

  33. heather t says:

    Three points:

    1. Never take NO for the first (or second, or maybe third, depending on your energy level) answer from any insurance company.

    2. This is why universal health care is a GREAT idea.

    3. Hit & run drivers should be found and shot.

  34. Sue says:

    Are any of your family members able to help out with a loan? While borrowing money from family can be difficult, this seems to be a time where it is needed.

    There is other medical and financial help out there, but it’s not organized into easy packages. Talk to everyone to find out what is available in your area.

    The other ideas in the comments are all great also. Good luck.

  35. GayleRN says:

    GET AN ATTORNEY NOW. My brother, for whom I am guardian and conservator, was in a similar situation. That insurance company will be paying his bills for the rest of his life along with a settlement for his children. The insurance companies will let you drown, but the court can enforce the contracts and laws that you don’t even know about. We are also a no fault state but that tends to be a relative term. Fault is assigned all the time when they decide whose insurance company gets to actually pay the bills. This is not necessarily discussed with you as both companies are interested in paying out the minimum.

  36. Jennifer says:

    I was t-boned by another driver one year ago, and I have learned more about both the health industry and personal finance in that year than I ever could have imagined. Unlike Ellen, I am a single mom on one income. I had great car insurance, great health insurance, a decent income, and no debt. Overnight, my financial world imploded. I was forced to return to work before I was truly physically able, out of necessity. I was forced to withdraw money from my child’s college account (a taxable event) in order to fulfill my regular financial obligations while waiting to be paid for my lost wages. But I’m so thankful I had that account!!

    Many people don’t realize that even if you aren’t at fault in an accident, you have to pay all your medical bills upfront while waiting on attorneys and insurance companies to settle. The driver who hit me was well insured, and I will be reimbursed. But I have to wait for it to wind it’s way through the court system, and pay everything out of pocket in the meantime.

    I can also tell you from personal experience that many hospitals and medical providers WON’T accept payment plans. I tried that route and was told “this is a hospital, not a bank”.

    Trent, I wish I had thought of the option of talking to the credit union about a personal loan vs. a credit card. I took out the first credit card I ever owned (at age 37) after my accident to pay my bills.

    I am fortunate that I at least had some money accessible to me, and I had good credit when I needed it. Many others aren’t so lucky.

  37. First of all, I’m so sad to read about Ellen’s situation.

    I can only comment on my state, New Mexico, and can tell you that the majority of my medical massage therapy and rehab practice is helping those who have been in auto accidents. Routinely, I accept referrals, and wait to be paid for my services until the case settles. I either bill MedPay/PIP, and/or get paid under a Letter of Protection from an attorney. Most medical providers here also work this way, and it is shocking that a hospital or other medical provider would demand a payment prior to the case settling – especially when an attorney is handling the case.

    Ellen’s story is a good reminder that raising coverage on auto insurance is an inexpensive and almost necessary thing to do these days – especially with the uninsured and underinsured motorists out there!

    I hope her husband and her entire family recovers from this accident and goes on to much happier things!

  38. Alison says:

    Ellen, Please contact your local United Way. In many communities, you can just dial 211, and they can connect you to the resources you need.

  39. Amy says:

    I was in a similar situation. I lived in Texas, 1700 miles from my family. I had a car smash through my bedroom wall and run me over in my bedroom. It was horrifyingly destructive, and caused severe damage to my neck. I had to move out of my house for two weeks, and was in physical therapy for 4 months. The night that the accident occurred, I called my insurance to find out how they could help me. They basically said, “Get a neighbor to cover the hole in the wall, and call an 800 number.” As I was being taken to the hospital, I knew I couldn’t handle the insurance company on my own. So I called a lawyer. He was the biggest blessing in my life. He made sure everything was paid out of the firm’s pockets, and then they were the ones reimbursed for the damages, not me. He guided me through every step. In times like yours, Ellen, let the professionals haggle it out. There’s no way you can know all of what you are entitled to, or what your rights are. I hope you can get this worked out!

  40. Sandy says:

    Really sad…yes, I totally agree with those advocating Universal Health Care in the US…why Americans don’t get that these horrible stories don’t have to exist is beyond me. I guess it’s the self-sufficiency (read: YOU ARE ON YOUR OWN!!)that gets in the way. We’d rather have really nice artwork at our hospitals, and pretty furniture there instead of just taking care of everyone and having it less pretty. I miss living in Europe…sigh…

  41. Poultry in Motion says:

    I have to agree with GayleRN. You need an attorney. There’s just something more to this story…on one side or another. You were denied short-term disability, which is fishy, then other forms of insurance won’t pay up *double fishy*…now the hospital won’t work with you at all, AND your employer (a healthcare firm no-less) won’t step in to help!?

    You need to see an attorney, pronto. There’s something seriously wrong with this story that’s not being told, and a legal expert could quickly get to the point to resolve it one way or another.

    Best of luck and sorry to hear about the circumstances.

  42. Diane says:

    Sometimes hospitals will “forgive” debt. It’s not highly publicized but at the end of the year they will often pick a “charity” case and forgive part or all of their bills. So call the billing department and set up a minimum payment plan with them and then in Oct/Nov give them a call and ask if they do this. You could also start thinking of a service type business you could run just once or twice that could earn you some extra $. For example, do you make good bread or have a great cheese cake recipe? Perhaps you could let the neighborhood, family, and friends know that for $ amount you’ll bring by fresh rolls or dessert on the weekends– perhaps you can make a bunch of holiday trinkets to sell. I know you don’t have much if any free time right now, having been thru similar circumstances myself. My baby girl was given a drug overdose by a nurse and you’d be surprised what we’ve had to pay. We took out a 2nd mortgage to pay the hospital bills and heard about the hospital’s forgiving plan way too late. Signature loans are better than credit cards. Just hang in there, if you had the financial backbone to be in as good a place as you were before all this, you’ll get there again!
    Diane

  43. MegB says:

    One of the most valuable lessons you can ever learn about insurance from a former professor of mine: “Insurance companies are in the business of collecting premiums, not paying claims.” Ellen, I know it’s exhausting, but hound the insurance companies and don’t take no for an answer. Hire an attorney if you need to, although with some persistence and good writing skills you may be able to get this done yourself. Also, remember to review all medical bills with a fine tooth comb and look for any excessive or improper charges. Good luck–you can do this!

  44. megscole64 says:

    This breaks my heart and terrifies me. We have nowhere near 6 months saved up. We do have Aflac – the Accident, Hospital, ICU, and Cancer plans (and yes, I’m recently an Aflac agent but couldn’t sell to most of you guys anyway). I’m DEFINITELY interested in the short term disability issue she’s experiencing. It doesn’t sound right to me and I’d be very curious to know what company it is with.

    People always think it could never happen to them. I don’t want to be in that situation – now we need to get our will and life insurance together. Sheesh.

    But planning is depressing! And that is a big issue for most people including my husband and I. Seems like many want the government to take care of us to prevent this sort of situation, which to me is insane. No one can protect us from everything and certainly the government doesn’t have a great track record of “taking care” of people – nor should that be their role.

  45. Kristine says:

    @Ellen – I am very sorry to hear about your painful situation. No one can predict these kinds of unfortunate incidents to prepare for them comprehensively.

    I think Trent’s recommendations are a great starting point, and as you move forward start asking yourself, “How can I” questions. How can I move from a position of debt to freedom? How can I increase our monthly cash flow? (maybe changing your W-4 to increase your take home pay now rather than getting a tax refund next year or re-financing any loans to get a lower monthly payment) The answers are there. We just need to train our mind to find them. Good luck!

  46. Karen says:

    Ellen – prayers sent to you and your family. I agree with other posters – try to find the jerk who hit you and work with the others for a payment plan. I was able to do that after I had a week’s stay in a hospital without any problems.

  47. Cindi C says:

    While paying your medical bills is the right response, it would be worth it to negotiate away from full payment to a payment plan. This way you are meeting your moral obligation to pay but not draining all your cash. Most medical offices will negotiate a plan, not ding your credit for it and be happy with the situation, but you may have to ask more than just the front-line phone person. A supervisor should be able to make that decision for you.

  48. John S says:

    “Unfortunately, his short term disability claim has been denied [...] they won’t pay out in the case of 3rd party causation of the time off work.”

    Huh??? So what are the circumstances under which your husband’s disability insurer would pay out? SELF-inflicted disability? EMPLOYER-inflicted disability? Disability inflicted on you by the insurance company itself? That makes absolutely no sense.

    Frankly, if that really is in the policy’s fine print somewhere, you should sue your employer for unwittingly partnering with such a scumbag third-party insurer.

    What use is a disability policy if they won’t pay out if the disability is caused by a third party? Ludicrous.

    I agree with those who say, keep after that insurance company. Threaten to get a lawyer, and if that doesn’t work, get one.

    I am so sorry for you Ellen. This is one of everyone’s worst nightmares. Good luck.

  49. littlepitcher says:

    You have my sincere sympathy. You have done everything right, and are in a (think of it as temporary, please) bind. I paid off my house instead of maintaining savings, and lost the house after being crashed by a tourist and hospitalized. Do check with your local Rotary, Kiwanis, etc. as well–some private individuals with fortunes have been known to assist deserving individuals. If the hit-and-run is found, research your attorney thoroughly to assure that he is nowhere in the defendant’s family (something I didn’t know to do). Don’t be afraid to ask anyone and everyone for help–the opportunity to give you all a hand up will make someone’s day.

  50. Janie Riddle says:

    Ellen you are doing things correctly. 33 years ago I was hit by a drunk driver who had no insurance. We talked to 2 different lawyers and they both said we could win any case against the driver but we would get nothing as he was a loser. The uninsured motorists insurance was capped at the insured amount and that was that. The insurance at my husband’s job paid much of my medical bill. Over time we paid the rest. Thankfully it was me injured and not my husband who was the main provider. We had help from our families in the way of help with children and such. It took everything we had saved for 5 years and everything for the next 5 years. The things I did that helped the most were often not covered by insurance. I should have let them disable me but did not understand that I would never get well. Many of the ideas are good that people are offering sound good but you may not have the energy to keep your family together and do many of them. Have you applied to social security about disablity? You may need to move in with a family member until things get better. None of this is what you want to hear but it may be your reality. You do not say how much pain your husband is in. Try to watch that he does not get hooked on pain meds as this can be a concern. The state I lived in would have paid for any employment rehab I could take but when I tried to go to classes I was not able to walk as my legs just could not do that much. I had help with my children for 2 years. This was from my family and his. Also children can be taught to help more that people realize. We still pay medical for chiropractor and alternative type care. My children have grown up and turned out well even they did not get to go to some things their friends did and mom could not always take them places. They had a family and we pulled together. Best to you. You and your family can make this. It is just not what you would have chosen. You will sure watch for opportunities to help others once you are past this. hope this is encouraging.

  51. socalgal says:

    Ellen,
    I am so sorry. You played by the rules and got screwed thanks to some really awful luck. The insurance companies are not going to pay out easily. My uncle has dementia & a long term care policy, but the company kept refusing to pay. I finally filed a complaint with the state dept. of insurance & voila–the money started flowing!I saved the expense of an attorney & my uncle now has the care that he planned & paid for so long ago. Good luck!

  52. Rose DeShaw says:

    You write a wonderful letter, clear, logical and concise, painful but necessary to read. This is real skill, likely one of the many you possess. You will come through this stronger, caring and wise. But right now you need to be able to survive. That disablity is a real key. Everyone gets turned down the first time. We paid a disability counselor to help and got it after being turned down, as soon as that counselor went to work. (My husband had been stabbed at his job in a prison). I am so thankful, looking back, that he is out of there and safe. Remember the saying, ‘There are no accidents – only appointments.’ Good will come to you from this, though it is hard to see that now. Everyone who has read your letter will remember you and your family through this hard time, thanks to your speaking up so eloquently.

  53. Kelly says:

    I just wanted to make a comment on the issue of paying up front and being reimbursed by the insurance company. In 2003, my car was totalled by a semi-truck and I had over 23K of medical expenses. All of those expenses were done on a “medical lien.” Much like a “mechanic’s lien,” the medical lien means that I got the treatment I needed because the medical personnel were willing to do so on a lien. When the nightmare was finally over in 2007, the liens were paid first and then I got the rest–which wasn’t much for all the suffering I went through and still deal with on a daily basis. The phrase, “life is not fair” is so true. Helen Keller even remarked on it–”Security is mostly a superstition. It does not exist in nature, nor do the children of men as a whole experience it. Avoiding danger is no safer in the long run than outright exposure. Life is either a daring adventure, or nothing.” Ellen, I hope this daring adventure becomes the stuff legend is made of in your family. Coming through something like this is comparable to having climbed Mt. Everest–I know. Don’t give up!

  54. Joan says:

    #15,#16,& #24 Really good advice. Get an Accident Attorney ASAP. They will work for you and then get paid when you get paid. In this case attorneys are the good guys. Many hugs and good luck.

  55. Jennifer says:

    I just wanted to say how sorry I am. This has got to be so incredibly stressful and frustrating because you have done everything right yet you are still stuck in a horrible spot. Y’all will be in my prayers.

  56. JuliB says:

    Perhaps you can file a case with modestneeds.org . This is to help people from falling into the financial brink. I found it when reading Forbes and have been a monthly contributor ever since. I would definitely kick in a few bucks towards your case.

    The money they pay out goes to a specific creditor.

  57. Mary says:

    Please contact you State Dept of Insurance and see if they can help you for free.
    So sorry this happened to you and hope everything turns around soon.

  58. AnnJo says:

    If I’m understanding Ellen’s situation, her husband’s health insurance is waiting on the settlement of the uninsured motorist claim and the uninsured motorist claim is waiting on the determination of the total amount, based on when he can go back to work. I don’t know much about this area of law, but an attorney who does could probably have worked out a solution short of paying up front. Even now, it might be worth having a consultation. An injury severe enough to take him off work for so long, in the hands of a competent attorney, might max out the UIM coverage and once that’s negotiated, the claim should be paid even if he isn’t back at work. (I think. But definitely worth checking out.)

    As for universal health care being a solution for Ellen, it might be. There’s no free lunch, though. In the UK or similar systems, Ellen would not have been sent a bill for the medical care, but she would have had a smaller savings account, due to higher taxes for their system, would have a much lower survival rate if she were to develop breast cancer or other ailments, would wait interminably for services like knee replacement surgery or treatment of macular degeneration, and would have faced bizarre limitations on services with life-threatening consequences. Everything’s a trade-off; pick your poison.

    Ellen, I wish you and your family the best.

  59. Kirstie says:

    “In the UK…would have faced bizarre limitations on services with life-threatening consequences.”

    The NHS might judge the clinical efficiency of some drugs, but they would never enforce the incredibly bizarre limitation of refusing to treat somebody because they had maxed out their health cover.

    How on earth does an insured couple working 72 hours a week end up with a bill for an ambulance???!!

  60. Rachel211 says:

    Thank God for long term disability insurance! My husbands father just happened to sign up for it when he was a gym teacher back in the 70′s. Not but a year passed when he developed multiple sclerosis. He first went to a wheel chair when he was about 25 and was completely paralyzed from the neck down by the time he died just a few years ago.

    That plan paid all of his bills for over 25 years. And that would have probably totaled into millions and millions of dollars. Had he not signed up for the measly $7 or whatever to be taken out of his paycheck per month I would have no idea what would have happened to his family and what would STILL be happening to his mom after his fathers death.

  61. LMR says:

    The poster who said that this sort of situation is uniquely American has obviously never lived outside of North America or Europe. In some countries there are no safety nets at all and almost no resources other than family to turn to in times of crisis. My husband’s family lives in Africa and as bad as Ellen’s situation is, it would be a huge step up for many people there.
    Having said that, however, I believe that we as a country can do a lot better to protect families like Ellen’s who “did everything right.” When I hear stories like Ellen’s it really makes me wonder the point of having insurance or of saving for a rainy day, for that matter, since it can all be wiped out in an instant.

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