What Steps Should You Take if You’re Struggling With Medical Debt?

According to the Kaiser Family Foundation, around 6 percent of American adults owe $1,000 or more in medical debt, and 1 percent owe more than $10,000. That’s 17 million people carrying somewhat significant medical debt, so if you are dealing with this financial burden, know that you’re not alone.

Medical bills can be hundreds or thousands of dollars depending on the procedure and your health insurance. Many people don’t have those types of funds ready to pay medical providers when an emergency comes up. However, there are options for legally dealing with medical bills you’re struggling to pay. Find out more about options ranging from debt negotiation to Chapter 7 below.

Reconcile Your EOBs and Medical Bills

Start by getting a good handle on your medical bills. The claims billing and insurance systems are, unfortunately, notorious for including errors. This is due in part to the complexity of medical billing and the potential for human error. A typo in claims coding or the misapplication of a payment can create chaos on your statement, making it look like you owe more than you actually do.

Before you pay any medical bills, reconcile the explanation of benefits (EOB) from your insurance company to the statement or bill from your provider. The EOB shows:

  • What was billed to the insurance company
  • How much the insurance paid
  • What the insurance company disallowed
  • How much may be your responsibility

If you are being billed for an amount the insurance company didn’t put toward your responsibility, contact your provider’s billing office to question the statement.

Ask for a Payment Plan

Once you’re sure the amount you’re being billed is what you actually owe, consider whether you can pay it now or over time in the future. Many medical providers offer payment plan options, allowing you to break your bill into smaller payments over the course of a few months or even a few years.

Payment plan options vary and may depend on factors such as how much you owe and whether you have paid previous plans responsibly. If you are a cash patient—meaning you aren’t using insurance to cover the costs of your treatment—ask your medical provider about any cash discounts before you set up a payment plan agreement.

Inquire About Hardship Programs

Sometimes medical bills are so high, even with applicable discounts or insurance payments, that you know you won’t be able to pay them all.

This can be true even if the provider offers payment plans. For example, a hospital might offer payment plans up to a year long, allowing you to break payments into 12 installments. But if you owe $15,000, that’s more than $1,000 in payments every month. This may not be possible depending on your income and financial situation.

If you are dealing with this type of case, ask your provider about hardship programs or other financial aid options. They may invite you to apply for programs to help with the cost of your bills.

Negotiate With Medical Debt Collectors for a Debt Settlement

Eventually, medical providers will write debts off their books and turn them over to collections departments. They might also sell the debt to third-party collection agencies. If this happens, you may be able to negotiate with the collector for a medical debt settlement. Because the debt has already been deemed a write-off and the collector paid only a fraction of the debt amount to buy it, they may be willing to settle for much less than the total amount you owe.

This does have potential negative implications for your credit score, as your credit report may reflect that the debt went to collections and was settled for less than you owed. However, it can be a way to clear the books, so to speak, so that you don’t have to worry about this debt in the future.

Assert Your Rights as a Debtor

Debt collectors must follow specific rules when contacting you about debts or collecting from you. If debt collectors are using unfair or deceptive debt collection practices to try to get you to pay a medical debt, you may have some options for asserting your rights via a complaint or lawsuit.

Even if a debt collector has not overstepped regulatory boundaries, you can stop them from contacting you constantly by asking them to cease doing so in writing. After that, they would only be able to contact you in writing to notify you of steps such as a lawsuit filed against you. While requesting that a collector cease contacting you doesn’t address the debt itself, it can reduce the stress involved so you can better consider your options—or continue to work on healing.

Consider Whether You Should File for Bankruptcy

If you’ve exhausted other options or find that your medical debt has created an avalanche effect that’s caused financial duress throughout your life, it may be time to consider bankruptcy. Medical debt can be included as an unsecured debt in a Chapter 7 bankruptcy filing or a Chapter 13 bankruptcy repayment plan.

To understand whether bankruptcy is a good option for you or to find out about other legal debt relief options for medical bills, call Benner Law at 774-228-7338 today.