Overwhelmed by medical debt? Take control with debt relief services from Alleviate Financial Solutions. Learn about your options and reclaim your financial life. Contact us for a free consultation
About one in five Americans has unpaid medical bills that are with debt collectors. These outstanding bills amount to $88 billion. It’s no wonder that medical debt has the biggest impact on credit scores of all types of debt. You can avoid becoming a statistic with the help of debt relief service providers. They can help you take control of your medical debt before it’s handed over to debt collection agencies.
It’s important to interrupt the process before the threat of debt collection appears on the horizon; otherwise, your unpaid debt is reported to consumer credit companies, and that’s when it starts to affect your credit score.
When faced with enormous medical debt, many people try to avoid medical treatment and medication at all costs, no matter how serious their medical condition is. This can adversely affect their employment as they either take a lot of sick days or their productivity and performance decline. It aggravates the situation and increases the risk of wage garnishment and bankruptcy.
What Causes Medical Debt
Well over half of all medical debt (66.6%) results from a single event—an emergency—and the short-term treatment that follows.
For example, you’re seriously injured in a car crash and need immediate surgery to save your leg from amputation. You stay in the hospital for a few days, go to a step-down facility for a few days, and then have physiotherapy for a few months to regain full use of your leg.
Medical expenses mount up, and suddenly you have a lot of debt to settle.
What Can You Do To Manage Medical Debt?
There are several tips you can follow to reduce or discharge your debt. The first thing to do is learn about your rights.
1) Don’t take the claim as gospel
Billing errors aren’t unusual, and you have the right to request verification of the claim from your provider and the medical debt collector. You can negotiate with your medical provider via the billing office if you’re not satisfied that the claim is valid.
Some doctors are willing to accept a reduced payment to avoid the bother of a debt collector, and others are willing to accept payment terms to get the full amount.
2) No Surprises Act
California has a law that prohibits surprise bills when unforeseen medical emergencies occur. They typically result from out-of-network care without your consent or knowledge.
If we go back to the car crash example; you lose consciousness and are rushed to the nearest hospital regardless of whether it’s out-of-network or not. Surgery is essential, but you’re in no state to give consent.
California law protects you from medical debt collectors in this situation.
3) Discount Care
You might qualify for financial assistance programs, like charity care, which result in reduced medical bills or free medical care. The proviso is that you must be uninsured and significantly below the federal poverty level to enter a charity care program or benefit from a discount policy.
You have a 180-day grace period to pay medical bills, during which time your creditors can’t notify credit reporting agencies of your debt. Moreover, creditors aren’t allowed to file a civil case until the 180-day waiting period is over.
You must be informed about the deadline so you can implement a debt resolution plan.
5) Have You Received Written Confirmation?
Hospitals are legally bound to inform you that they’re going to hand over your unpaid bill to a medical debt collector. They also give you one last chance to apply for free or low-cost care.
Did You Know?
In July 2022, the three biggest credit bureaus, Equifax, Experian, and TransUnion, decided that once medical debt was discharged, the debt note would be removed from consumer credit reports. Furthermore, unpaid medical debts that start below $500 are excluded from credit reports, and medical collections that start at $500 are excluded from credit reports for one year.
If you haven’t discharged your debt in that time, your credit report will reflect non-payment of debt.
Solutions To Medical Debt
There are a few types of debt settlement programs that enable you to pay or reduce medical debt.
You could talk to the medical services provider concerned about a low-interest repayment plan or an interest-free payment plan. The terms will depend on the size of the debt, the number of installments you can afford, and whether you can put down a fair deposit. Always ask about accompanying fees, which you must factor into the total debt amount.
A medical credit card is an option if you know you can commit to regular payments over 6–12 months. This is because medical credit cards are often interest-free for up to 12 months. If it takes longer to settle your debt, you will be charged quite a high interest rate, which will significantly increase your monthly payments and make it more difficult to discharge your debt completely.
Talk to a credit counselor about other options available, including personal loans (perhaps a 0% interest credit card) and a medical bill advocate who represents you and acts in your best interests to reduce or remove debt. The best way to find authentic, professional, and ethical representation is to look at Medical Bills Advocates of America, the premier group for accredited advocates.
Reclaim Your Financial Life
The majority of people with medical debt feel trapped and doomed to circle the debt cycle for the rest of their lives. The good news is that debt help is readily available to get you out of overwhelming financial trouble. When you choose a reputable company like Alleviate Financial Solutions, you’re giving yourself a fair shot at financial freedom.