Rant: Insurance copays bankrupting you? Upside-down on your mortgage? Join the club.

[phrigndumass]

It used to be that a homeowner built equity in their home, and in most cases if a life crisis came about, the homeowner could use this equity as secure collateral to cover at least part of the cost of the crisis. Those were the good old days.

When the housing market crashed, that equity vanished and the ability of a homeowner to handle a monetary crisis vanished as well. Not only that, some bankers were lending without requiring any money down, zero equity, and when fair market values dropped, many homeowners now found themselves owing more on their mortgages than their house is worth.

Add to all this the fact that health insurance premiums have more than tripled in the last decade, while at the same time providing fewer benefits or requiring the insured to pay a bigger part of the bill up front. The new health care legislation that passed has helped by setting some annual out-of-pocket caps, but if you have no cash on hand or equity from which to borrow, even the smallest of crises can nearly bankrupt you. This has got to change, especially since it affects poorer working folks far more than it does others.

This is my situation today.

Many of you know through my Daily Widget posts (tracking Obama’s election potential) in 2008 that I have been dealing with OCD and seeing a therapist. This is just the tip of the iceberg. I have also developed a debilitating condition called Adrenal Exhaustion, which is really a symptom of something else currently unknown. This condition leaves me fatigued most of the time, and I have become unable to work due to lack of energy and focus.

My disability payments will kick in three months after the first day of absence (May 18), but in the meantime there will be a six-week gap where I have no time benefits left to use at work so I won’t be paid for that time. I can apply for other assistance in the gap, but the bureaucracy to receive it will take longer than the gap. Meanwhile, the medical bills (mostly copays and parts that the insurance company refuses to pay for, like reports for disability) continue to pile up.

I purchased a house in 2005 with no money down and two mortgages, one of them interest-only, because it was my dream home and the bank made it possible for me to do so. So I am upside-down on my mortgage(s), owing several thousand dollars more than what my house can be listed for. I will no longer have the funds or the energy to maintain the property, so I am forced to sell it right away. Realtor commission and closing costs will also add several thousand dollars to the closing … money I don’t have.

The point to this rant is that something has to change to help people in these gaps, whether it be legislation, timely nonprofit assistance, or even awareness. We can’t always count on others to help us, especially since many have found themselves in exactly the same situation.

If you have found yourself in a difficult situation due to the irresponsible schemes of the banking and insurance industries, I hope you will rec this thread to give it more exposure. You are not alone.

In the words of a dear DU friend, “The most important thing to remember is that you are a human being, you are not a career or an address in an upscale neighborhood or a fat retirement investment account. And we humans have been living since day one without any of those things.”

Walking away is a viable option in many instances.

My Best to All,
- Phrig