Medical debt - What to know and how to pay it off

According to The American Journal of Medicine Reports, an average hospital stay in our country amounts to about $5,220 per day. It is much higher than in some other countries, say Australia, which is about $765.

As per a 2016 Kaiser Family Foundation and New York Times survey, more than 1 in 4 people in our country have problems paying a recent medical bill. This condition often leads to medical bankruptcy. The average age of people who file for medical bankruptcy is about 45 years of age.

What can happen when you can’t pay your medical bill?

Your medical bill might go to debt collection if you can’t repay your medical bills or you refuse to work with the hospital to make a repayment plan.

Usually, after a waiting period of 180 days, your unpaid medical bill will show on your credit reports thus affecting your credit score negatively.

Moreover, you might have to pay penalty fees, and your healthcare provider might also take legal action against you.

Can a medical bill go away if you can’t make payment?

No, it doesn’t go away automatically if you ignore them. It might go for medical bill collection; that is, your bill might be sold to a debt collection agency.

It can disappear from your credit report after 7 years since such a negative item usually stays in credit reports for that much time.

You can ask for medical debt forgiveness by submitting your pay stubs, tax returns, etc. as required by the hospital and it’s entirely the authority’s decision to forgive the amount you owe.

RIP Medical Debt helps households to eradicate medical debt, whose incomes are less than 2 times the federal poverty level guideline or who are insolvent. This organization runs by donation. So far, they have abolished about $600 million in medical debt.

Can your medical bill go to collections?

Yes, your medical bill can go to collections if you can’t repay them or negotiate with the hospital authority for a repayment plan. As already mentioned, usually, a bill is sent to collections if you can’t make any payment for about 180 days.

Can you face wage garnishment due to nonpayment of medical bills?

When you become delinquent on your hospital bills, the creditor or the hospital authority can sue you in court, obtain a judgment against you, and get a court order to garnish your wages.

The creditor can’t garnish your wages if you stop paying your hospital bills.

Can you be sent to jail for not paying the bills the hospital has generated?

A medical bill is considered to be a civil debt. Therefore, you can’t be sent to jail for not paying your medical bills. However, a debt collector can trick and make your case a criminal one.

What happens is, when a debt collector files a lawsuit and the court orders to show up, you’re supposed to obey that. If you don’t, you can go to jail for not obeying court orders. However, it is possible only in a few states like Ohio, Missouri, Pennsylvania, Illinois, and Minnesota.

What should you do when you get a court summons?

You need to respond properly when you get a summons from the court. First of all, read the instructions carefully. Make sure you look at the deadline within which you need to answer the summons.

Then, if you receive the summons in person, try to answer it within 20 days. And, if you receive it via e-mail, then you need to prepare the answer within 30 days.

Is there any SOL period on your medical debts or any laws?

Yes, like most other debts, there is an SOL (Statute of Limitations) period on medical debt, which varies from one state to another. Like in Connecticut, the SOL period on such debt is 6 years. After that time, a creditor or collector agency can’t sue you for nonpayment of debts.

How does a delinquent medical bill affect your credit report and score?

According to the National Consumer Law Center, no hospital or medical provider will report the debt directly to the credit bureau. However, if a debt is handed over to a collection agency, it can report it to the credit bureaus. As per a report published on a 2018 Consumer Reports survey, about 30% of people said that the medical bills were sent to collection agencies. Moreover, you may not know that you’re delinquent until you get a call from a debt collector.

How can you repay your medical bill?

Do not ignore your medical bills. Here’s what you can do:

  • Ask for help from a friend or family member

    Ask for the itemized bill from the hospital and get the help of a friend or family member if you can’t understand the bill. Address your medical bills quickly without wasting much time.

  • Negotiate with the hospital authority

    Arrange a face-to-face meeting with the hospital authority and discuss possible repayment options. You can also reduce your overall debt by making a substantial payment in the beginning.

    It is quite important to make the hospital understand your situation. So, request if a social worker or a patient advocate can meet with you to discuss your situation. Explain your situation and work out a repayment plan with them.

  • Resort to professional help

    You can contact a consolidation or settlement company for medical debt consolidation or to settle your medical bills depending on the amount and how much you can pay off.

    First of all, go for a free credit counseling session wherein the debt relief company can analyze your debts and make a decision on which option will be favorable for you.

    If you enroll in a consolidation program to repay your medical bills, then you can repay your medical debt along with other unsecured debts through affordable single monthly payments.

    However, if you can’t repay your unpaid bills in full, a settlement program might help you solve your debt problems by paying less than what you owe.

Here are 5 tips to lower medical costs while traveling

  1. While planning your trips consider medical costs separately:

    Many things can happen once you are out there roaming around and seeing the world.

    Accidents are the first case that you should have in your mind. Falling ill, fevers, cold and cough, are in your hand to some extent. Stay fit and you can evade them.

    But road mishaps and accidents are something that includes fate. So, you must be prepared accordingly for such unexpected expenses. Therefore, you need to include these costs in your budget for your trip.

    From now on, have a different section that will be dedicated to emergency medical expenses. And this amount should be huge. Say, if your total trip costs some $1K, then you must keep an extra $300 separately in hand for these types of unforeseen costs.

  2. Buy travel insurance:

    To be on the safer side, it is always better to get yourself insured. Travel insurance is practically very important. It has the capability to get you covered in many situations. It will cover your medical expenses, hospital bills, evacuation costs during accidents, and so on.

    On top of that, if you purchase an adventure/extreme sports travel insurance, you will be covered for injuries suffered while performing high-end activities like running, playing, diving, jumping, and many more.

    So don’t go uncovered while planning your trip.

    Have a detailed talk with your preferred insurer and see what policy suits best for your trip plans.

  3. Maintain an HSA:

    Most employees have the benefit of Health Savings Accounts. Don’t overlook it. This account has a cash value asset that gets rolled over year to year. Not only that, you can use this cash value to satisfy other expenses as well.

    Also, you can get better medical and health insurance terms if you have an existing HSA (Health Savings Account).

    As you can see, the HSA works as savings and it will be of great help even if the amount is not used for medical expenses.

  4. Have an idea about the country’s medical cost where you plan to visit:

    This should also be your concern.

    Before leaving for any specific country, get good knowledge about the medical costs, nearby hospitals, well-known doctors, and so on.

    This way you will be in good control of any situation you might have to face.

    Also, don’t forget to have a full-body check-up by your family doctor before leaving on a trip. This check-up should be one of your main priorities.

  5. What if you still incur medical debts:

    Keep yourself calm and don’t panic in the foreign land.

    Come back and then try to handle the situation. Carry your credit cards over there, so that whatever debt you incur will be surrounding your bank in the USA.

    Once you are back, you can handle the situation in a much better way.

    You can participate in the Debt Consolidation Care Forum, to get help regarding your debt problems.

    Or you can also call us anytime between 9 am to 6 pm (PST) at 800-3328-913. We will help you out, the best we can.

FAQ:

Are you sure the hospital is charging the right amount?

It is quite natural that you’ll be worried about your near ones’ health and the medical bills go out of mind. However, the medical bills become worrisome, too.

The hospital administration often makes mistakes while preparing the medical bills, consisting of illegitimate charges. However, this does not mean that you should pay whatever the hospital authority charges you. Rather, you should keep a close eye on medical bills, and find out if the hospital authority has overcharged you. They make errors in the medical bills to make bigger profits. In these circumstances, it has become very important for people to become aware of the fraudulent activities of the hospitals.

Here are 4 signs that reveal you have been overcharged by the hospital:

  1. Illegitimate charges:

    Sometimes the hospitals charge money for the services you haven't used at all. If you're the patient and it is not possible for you to look at the medical bills, then you can ask your family members to check them thoroughly. You can tell your family members about the services that the hospital has provided you with. If the hospital is charging for an antibiotic or injection which you haven't taken, then don't pay for it.

  2. Wrong treatment charges:

    It often happens that the hospital charges you for the wrong medical treatment. For instance, you have undergone treatment for pneumonia, but the hospital has charged you for surgery. Look at the medical bills minutely. Go through the codes on the bills. If you can't decipher the codes, you can browse through different medical websites to decode them.

  3. Double charges:

    The hospital authorities have to make hundreds of medical bills every day. Moreover, there are several departments in hospitals. So, each department may not know what the other department is charging for. For instance, the anesthesiologist can charge you for your anesthesia. On the other hand, the hospital administration may also charge you for the same thing. A thorough analysis of the medical bill can help you detect the mistake easily.

  4. Exorbitant fees:

    Hospitals often charge excessively high fees. If you feel that the hospital is charging a very high fee, then speak with the concerned persons about it.

    If the hospital is breaking any laws, then you have the right to fight with the authority.

    Finally, if you can bargain with the credit card companies to lower the bills, then why not for your medical bills? You can apply the same strategy to your medical bills too. Around 15% of the patients negotiate with the hospitals to lower the medical bills. Around 40% of the people asking for a reduction in the bill amount get a discount. Therefore, you can always ask for a reduction in the fee before paying your bill.

How can you evade medical bills while traveling?

The problem becomes worse when one falls ill and requires some medical emergency or treatment while traveling. Travel costs and medical bills merged together become quite difficult to pay off.

What makes medical bills go so high when you are traveling

Probably the biggest thing that matters is foreign doctors and hospitals. When you are traveling, it is presumed that you are in a distant land away from home, where all the faces are unknown. So, any problem you face, you have to deal with it alone, all by yourself.

There are evacuation charges when one lands into an accident along with other high-end transportation costs. Then comes the hospital bills and other miscellaneous expenses like tests and equipment charges.

Moreover, there are huge chances of fraud, when it comes to a foreign land.

When all these are counted together, the bills are about to pass your expectations.

How can you tackle medical debt during the pandemic?

Reports say that if you’ve already been contacted by collection agencies for medical debt before the pandemic, then the collection agencies may continue doing that.

So, if you’re facing medical debt issues, you can opt for medical bill settlement. You can contact a settlement company or a law firm to negotiate with the collection agency on your behalf. They can help you get rid of medical bill collection in a better way.

Last Updated on: Wed, 14 Oct 2020