Most people have no idea how much they spend on health care.

When you file bankruptcy, one of the forms for the bankruptcy court is called Schedule J.  Schedule J is your budget.

As a bankruptcy lawyer, I spend a lot of time talking to people about their budgets.  And most people in Northern Virginia have no idea how much money they spend on health care.

The US Trustee is the federal agency that oversees the bankruptcy system.  They produce an average budget.  That average budget has $60 per person per month for health care.  Most people think $60 a month is high.  I think it’s low.

When you do your budget, think carefully about your health care costs. Have you covered the dentist? The orthodontist? Eye glasses? Contacts?

What’s the right amount?

$2.9 trillion on health care–$770 per person per month!

This month a study showed that the Americans spent $2.9 trillion on health care in 2013.  That’s $9255 per person per year; or $770 per month.  (That study celebrated the good news that health care costs are growing more slowly!)

Now that $770 includes what health insurance covers.  And it includes a lot of money we spend on caring for the seriously ill, accident victims, and the very elderly.  Still, compared to $60 a month, $770 a month average is a really big number.

When you think about that $770, then you’re not surprised that health care costs (and time lost from work for medical reasons) are the biggest cause of bankruptcies.

Half the families I see have been hit hard by medical issues–for themselves, their children or their parents.  But when they fill in their health care budget, they put down $25 a month.

Those same people tell me they are living from paycheck to paycheck.  A lot of them say they run out of paycheck before they run out of month.

But when we add up their budget, their own budget shows they have $450 a month left over.

Of course the bankruptcy court does NOT want to approve somebody who says they have $450 a month left over.   The difference, usually, is people spend more than they think on health care.

Want to know more about how to budget your health care costs?

Are you still stuck?  Having trouble thinking where your health care dollar actually goes?  I have more info here.