If your medical bills are overwhelming, you are not alone. Did you know that 60% of all bankruptcies either “very much” or “somewhat” involve medical debt?
Look: a health scare shouldn’t result in an economic tailspin, but that’s the situation many people are facing. Even people with good insurance are being surprised by unexpected medical bills because they unknowingly got out-of-network care or accessed a service that wasn’t fully covered.
And the uninsured rate is going up. More and more people are only able to afford a bare bones health plan that only covers catastrophic care – or has a deductible so high that it has to be a catastrophe for you to seek coverage. At the same time, insurance networks have gotten narrower, meaning you’re more likely to end up in an out-of-network situation.
Ways to deal with medical debt
According to the American Hospital Association, in 2017, American hospitals provided over $38 billion in care to people who could not otherwise afford it. In some situations, hospitals are required to provide charity care to people with low incomes – but they sometimes send a bill, instead.
That’s one reason you should try to negotiate your hospital bill down to something you can afford. Explain your situation. Whether it’s because your insurance didn’t cover everything or another problem, you may find sympathetic ears and someone who will help.
Check if you’re eligible for assistance. The first thing you should try is contacting the hospital or healthcare provider to determine if you qualify for their low-income assistance program, if they have one.
Know that medical bills vary from patient to patient. That $20,000 bill you got for an MRI? It might cost the next patient next to nothing due to different insurance or other factors. Ask the hospital whether you can get the Medicare rate – that’s typically among the lowest available.
Don’t try to negotiate with debt collectors. Generally, it’s a waste of time to try to negotiate down your bill with a debt collector. Instead, go right to the provider.
Try offering a repayment plan. Healthcare providers – and even debt collectors – sometimes accept repayment plans over time. A plan you can afford could keep the medical debt from affecting your credit.
Bankruptcy may be your answer. If medical debt has become unmanageable and you’re facing garnishment of your wages, for example, be aware that your medical bills could be wiped away in bankruptcy. Chapter 7 bankruptcy allows you to discharge all of your qualifying debt, while Chapter 13 allows you to consolidate your debt into an affordable repayment plan.
If you’re having trouble paying your bills, you should know that you can always ask for help from a bankruptcy attorney. Your lawyer will help you understand the pros and cons of bankruptcy versus other debt reduction techniques. Find out if you qualify to have your debts reorganized or wiped away.