An unexpected illness or injury can quickly plunge you into debt. A visit to the emergency room can cost you thousands of dollars. Medical costs are constantly rising. Even with health insurance, you may be stuck paying a steep deductible.
Medical bills are the leading cause of bankruptcies in the United States, according to a study by the American Journal of Medicine. Even more alarming, 80% of those who filed bankruptcy due to medical debt actually had health insurance and their debt was low ($18,000) compared to those who filed but didn’t have health insurance ($27,000). Needless to say, medical debt is a serious issue in the United States. Medical bills are quite serious and can cripple your finances. Hopefully, you can deal with your medical debt before it pushes you to bankruptcy.
Make sure you have a bill, not just an explanation of benefits.
Read through the mail to make sure you actually have a balance due. Sometimes the health insurance company sends an explanation of benefits to explain what’s been paid on your behalf. The EOB can actually give you a heads up to medical bills that are on their way. If the EOB shows the insurance company only paid part of the claim, you can expect the doctor’s office to send a bill soon.
Verify the item isn’t covered by insurance.
Medical billing is complex and mistakes often occur. Make sure your doctor’s office or hospital billed your insurance company for the right services and follow up with the insurance company to figure out why the bill was not paid. Asking for debt validation and verification is important in clearing up mistakes and can save you thousands of dollars.
Make payment arrangements.
Be prompt in contacting your doctor’s office or hospital if you cannot pay your bill in full. Let them know that you plan to follow up your insurance company. The doctor’s office or hospital should know that you are not just ignoring the bill. If you are responsible for the balance, ask for a payment plan. Make sure you review your budget to figure out what you can afford. As with any other bill, make your payments on time each month. Otherwise, your account may be sent to a collection agency despite your previous payments.
Nursing Home Expenses.
Some nursing-home admission agreements include provisions that attempt to make caregivers or other third parties personally liable for payments for the resident’s care, the Consumer Financial Protection Bureau said in a new report examining facilities’ debt collection practices. Under federal law, nursing homes participating in Medicare and Medicaid can’t make such provisions a condition of admission or continued stay in the facility. Yet some nursing homes hire debt collectors to collect residents’ unpaid bills–which can range into the hundreds of thousands of dollars–from third parties based on these invalid provisions, regulators said.
The family members and friends subjected to these actions are often unaware of the law and don’t have the resources to respond to litigation, resulting in judgments against them. Some caregivers targeted for payments for a loved one’s care have had their wages garnished and even lost their homes, the CFPB said.
When debt collectors attempt to collect invalid debts and give information on those debts to credit bureaus, they may violate federal debt-collection and credit-reporting laws, the CFPB and Centers for Medicare and Medicaid Services warned in a joint letter to nursing homes and debt collectors Thursday.
If you are being abused by debt collectors concerning medical debt, please contact me for a free consultation.