The Truth about Medical Bills
A Harvard Study conducted in 2005 points to medical bills as the leading cause of bankruptcy in the United States. What is the truth about medical bills, and what can you do to avoid medical debt?
Unfortunately, most people do not anticipate medical bills. People do not plan for or intend to get sick, and they rarely budget ahead “just in case” it should happen. The same holds true for people with health insurance. Rarely, if ever, does a person consider that the existing policy may not cover all of the expenses, or that the deductibles could be just as much as a mortgage payment in any given month. Therefore, people are generally blindsided by medical bills and the mess that they can cause.
In the case of a person who actually has health insurance, co-pays alone can cause financial hardship. For example, consider a woman who suffers a spinal injury in a car accident and must attend physical therapy three times a week to relearn how to walk. What if her co-pay for a specialist is $50, and she only receives $500 per week on disability? At the end of each week, the woman might be torn between paying the co-pays for her necessary physical therapy or buying groceries. After all, there is only so much money to go around.
Now consider the cases in which insurance companies only cover a portion of services rendered by a medical facility. Using the example above, the woman's insurance company might only pay 50 percent of her spinal injections because they are considered “experimental” for her condition. Therefore, she must pay an additional $1000 to undergo the only treatment that relieves the pain in her back. When you add those balances to the co-pays due, it’s easy to see how a person with good insurance can become overwhelmed with medical bills.
The Effect of Medical Bills on People Without Insurance
Medical bills can be equally, if not more, devastating for those without any health insurance at all. One day in the emergency room for a broken toe can easily rack up $10,000 of debt for a patient. Just imagine the case of a person that suffers a serious car accident or is forced to undergo an extended hospital stay. A person can literally amass hundreds of thousands in medical debt in a single day due to circumstances clearly beyond his or her control.
How to Handle Unpaid Medical Bills
The first step in handling unpaid medical bills is to work directly with the hospital or doctor. In some cases, medical practices will give discounts for those in need or forgive medical debt all together.
For those with some ability to pay back the medical bills, a payment plan may be worked out in lieu of sending the bill to a collection agency. As a word of caution, a person should always get the terms of a discount or extended payment plan in writing, should the bill end up with a collections agency by mistake.
However, if a person finds that the repayment schedule put forth by the hospital is impossible and just plain out of budget, he or she can always apply for a medical consolidation loan. This is similar to credit card consolidation loans, wherein all of a person’s medical debt will be combined and paid back in installments over a period of three to five years.
When Medical Bills are Just Too High
When medical bills are just too high and causing economic hardship beyond control, a person can always find relief in bankruptcy court. However, it’s important to note that bankruptcy cannot be filed based on medical bills alone. Individuals will only qualify for bankruptcy protection based on all of their unsecured debt put together as a whole.
However, this is rarely a problem for people with overwhelming medical bills, as months (and even years) of co-pays, prescriptions, and monthly installments to the hospital tend to spill over and cause credit card debt or delinquent payments across the board. Should bankruptcy seem like the best option to get rid of medical bills once and for all, a person should immediately contact an experienced attorney to ensure eligibility and receive general help in the process.
