Medical Debt and Collections

Medical debt is financially and emotionally taxing, more so than most other types of debt, but there are ways to manage it before it gets out of hand.

Health care and hospitalization costs have soared far beyond what most people can cover on their own. Unless you have a rock-solid insurance policy, a medical emergency could suck up your savings like a vacuum cleaner, leaving you with debts you can’t cover.

Medical bills, even major ones, can be negotiated, and the cost of chronic health problem can be managed through various assistance programs. Learning how the system works and seeking financial help for medical bills might save you from financial ruin. It’s important not to run away from a debt or fail to deal with it quickly. Explain your financial situation to a hospital or health-care provider with the hopes of negotiating a settlement you can afford.

Medical debts take a while to show up on your credit report, but when they do, they can be as damaging as a default on your credit cards. The delay can be to your advantage, giving you a half year or more to arrange a financing plan or, better yet, pay the debt. If you have insurance, it’s important to discuss your coverage as soon as you get a bill to see how much is covered. You should take whatever steps possible to avoid your debt going into collection, which can seriously undermine your credit worthiness.

Legal complications resulting from medical debt can severely impact the financial well-being of your family. Medical debt is the leading cause of consumer bankruptcy in America.

But if you’re in medical debt, you’re far from alone. One study by the National Center for Health Statistics found that more than 43 million American adults have had problems repaying medical debts.

Know Your Insurance Coverage

Sometimes health insurers misinterpret a bill and refuse to pay it even though your policy ought to cover all or part of it. Before you begin to panic, call your insurance company to review your coverage. A clerical error in today’s complicated insurance reporting system might be to blame for a bill you shouldn’t have received.

Study the bills and contact the healthcare provider. Ask if all procedures were necessary and whether all the supplies allegedly used to treat you were used. Next, look for coding errors. Look for expenses that are especially high and use available online references for common medical procedures to compare the costs in your bill with those paid elsewhere for the same procedures.

Study your insurance policy to determine your coverage and compare it to the explanation of benefits you receive from your insurer. If you find discrepancies, call your insurance company to discuss your questions. If the bills are too complicated for you to decipher, you might want to contact a patient advocate or medical billing expert to review your documents and charges.

In many cases, especially those involving a hospital stay or visit, covered and non-covered expenses can be commingled in a bill. The doctor who worked on your injured leg might be an in your health insurer’s network, but the anesthesiologist who attended during surgery might not be. You need to study your bills and discuss them thoroughly with your insurer to learn if an uncovered expense can be handled by the company.