Over the long term, one of the most expensive types of insurance is health insurance. Premiums are often quite substantial, even for a minimum amount of coverage, but can be a lifesaver should a long term-illness arise or a sudden medical emergency occur. One way in which consumers can limit the financial footprint of their insurance is to negotiate their premiums with their insurance company. Depending on their current level of health as well as the type of treatments they and their family may require, it is possible that a more reasonable rate can be obtained, especially if the client has been with the company for a long period of time. However, the recent economic downturn has left a number of insurance customers in a position of being almost or entirely bankrupt, and this can limit their ability to negotiate premiums. Even so, there are still options for those who find themselves in this unfortunate position.

First, it is important to understand bankruptcy in the context of a health insurance plan. So long as premiums can still be paid, the plan will not default, and if a bankrupt employee still works for a company that offers a group plan, there may be a options to mitigate or defer payments so that coverage is not lost. If, however, an individual finds themselves bankrupt and in a position where new insurance must be obtained, things become more complicated. Second, bankruptcy itself must be understood. Personal bankruptcy occurs when a person chooses to declare that they cannot make the minimum payments on their debts and finds themselves sliding behind rather than ahead. Should this occur, bankruptcy can be filed and certain debts can be canceled, however this will stay on a person's credit record for a pre-determined period of time.

When it comes to negotiating with the insurance company after a bankruptcy, there are two possible options. In some states, previous credit history cannot be used to determine premiums and coverage, and so bankruptcy will be less of an issue, and the client's ability to negotiate premiums will be stronger. In states where companies can use bankruptcy as a way to limit or reject coverage, clients must do their utmost to demonstrate not only that they are currently employed and have a steady stream of income, but also be willing to make an effort to shop around and find the best options for their situation.

While bankruptcy will not make it impossible to obtain reasonable insurance rates, it can make the process more difficult, and it is important that if a company chooses to use bankruptcy as a sticking point, the consumer is prepared to demonstrate they do not represent an unreasonable risk.