STRATEGY FOR HANDLING MEDICAL DEBT
A majority of families experiencing financial difficulty have medical debt. Sudden illnessor an accident can lead to overwhelming medical debt, even if you have health insurance. Developing a game plan or strategy for dealing with medical debt can be very helpful in properlymanaging and potentially paying medical debt.
First, be certain you have explored the opportunity for assistance from the medicalprovider. Federal law requires nonprofit hospitals to maintain policies for offering patientsfinancial assistance. These policies and how to apply for financial assistance must be in writingand made available to patients. Most non-profit hospitals have programs or policies to reduce oreven eliminate medical charges if you are eligible for financial assistance. Many other medicalcare providers are willing to reduce the amount of your charges if you can show financialhardship.
In some states you may be able to apply for Medicaid and if you are found eligible,Medicaid will cover retroactively medical bills incurred over the last three months. Thiscoverage is not available in every state however. Be sure and speak with someone in the healthcare provider’s billing or patient financial assistance office to see if any financial assistance maybe available for you and your family.
Once you receive a bill from the medical care provider check it carefully. If you havehealth insurance contact your health insurance carrier about coverage, in advance of the treatmentif possible. If any charge is denied coverage call and ask your health care insurance carrier whythe charge was not covered. You have a right to appeal. If you wish to appear denial of coverageyou should call your insurer and tell the insurer that you want to appeal the denial of coveragedecision. Do this as soon as you can. There is a deadline for appealing denial of coverage. Contact your state insurance commissioner or state attorney general’s office if you needassistance.
For most families it is not a good idea to put medical debt on a credit card, even a“medical credit card.” If you pay medical debt with a credit card you may be taking on theburden of large minimum payments on a credit card. This new or larger payment may not beaffordable along with all of your other monthly obligations. Never transform unsecured medicaldebt into secured debt by borrowing against a car or your house in order to pay medical debt. Ifyou borrow against your house or car to pay medical debt you potentially put your home and carat risk if you cannot make payments. Medical debt may have a lower interest rate as compared tocredit card debt. Some medical providers offer no interest payment plans for 12 months or more.
You should prioritize your debt . Never pay medical debt before mortgage or car loanpayments. You should provide for your family’s basic needs such as food, shelter and utilitiesbefore paying medical debt. However, although payment of medical debt should have a lowpriority, it is not a good idea to simply ignore it entirely. Hospitals and other health careproviders may turn over medical debt to debt collection agencies, sometimes in a very shortperiod of time. Talk with the collection agency but do so at a time of your own choosing. (For more information see “Strategy for Handling Debt Collection Calls”) Often you can set up a suitable payment arrangement with the collection agency.
People are often concerned that they may be denied health care treatment if they can’t pay medical bills. While this can be true of practice groups and physicians this is not the case with public hospitals and community health centers. A hospital cannot deny you emergency room treatment under federal law. (Emergency Medical Treatment and Active Labor Act (EMTALA)). If you request financial assistance from a nonprofit hospital, the hospital cannot deny you care in any part of the hospital because of an old bill until it determines whether or not you are eligible for financial assistance. You may have several months from the time you first received a bill to request such financial assistance. If you are a Medicaid recipient and you owe a doctor or other health care provider for co-payments or deductibles, Medicaid prohibits health care providers from denying you future services.
Finally, keep in mind that overwhelming medical debt can be an indication that you are in financial difficulty and may benefit from discussing your situation with an experienced debt relief attorney. At Kinkade & Associates we appreciate the fact that the decision to seek advice from an attorney is not easy. On the other hand, significant and often unnecessary damage can be done by waiting too long to seek advice regarding your situation. This is where an experienced, knowledgeable and compassionate Kinkade & Associates bankruptcy attorney can assist you in making the best decision for you and your family. At Kinkade & Associates we welcome the opportunity to meet with you personally, discuss your concerns and answer your questions regarding your circumstances and whether or not you should consider potential bankruptcy.
During your free initial strategy session an experienced, knowledgeable and compassionate Kinkade & Associates attorney we will discuss with you whether or not bankruptcy may offer you relief from creditors (including harassing phone calls and letters from debt collectors), stop garnishments, stop foreclosure or even stop a pending Sheriff’s sale of your home. In your free initial in-person consultation with a local Kinkade & Associates attorney we can discuss whether your situation would permit you to propose to your creditors and the bankruptcy court a plan which would allow you to repay your creditors and catch up payments on your car and home – potentially rescuing your home from foreclosure – bringing you current with those creditors and giving you the opportunity for a fresh start.
Please do not hesitate to contact us for a free initial in-person strategy session if you have any questions about whether or not we can assist you.