We haven’t seen a rush and crush on medical bills like we’ve had the past year since the Spanish flu pandemic of 1918 which took at least 20 million lives worldwide and nearly 700,000 Americans. In those times, we didn’t have the health insurance options that Americans are fortunate to have access to today.
But that doesn’t mean that even with insurance medical bills can’t snowball in a hurry. With the aggressive number of people afflicted with COVID-19 still on the rise, an individual or family can be suddenly faced with grave medical debt that, if quickly and intelligently addressed, can lead to a dire debt situation. At the very worst if debt isn’t addressed a debt lawsuit can be levied on an individual adding very dark sadness to an already emotionally draining experience of having fought the disease (and hopefully won that battle).
“Faced with rising medical costs the past year and now stretching into the future, I advise people to really take a look at how they’re managing their rising medical debt and even consult with an expert,” explains medical debt legal specialist Chantel Grant, ESQ., a Senior Partner at the lawsuit-fighting GM Law Firm in Boca Raton, Florida. “The goal is to get debt resolution and avoid a medical debt lawsuit.”
Understanding Medical Debt
Paying off medical debt is different than dealing with other types of debt. Experts maintain there are a greater amount of ways to negotiate a medical debt’s resolution than you might have with credit card debt or private student loan debt.
There’s the greatest amount of errors from insurance companies and even the hospital’s poor record-keeping that can be called into question.
It’s important to look over every bill carefully and make certain the services and hours in the hospital that you’re being charged with are actually true and accurate.
Understand your insurance provider’s explanation of benefits to assure that what you’re personally on the hook to pay is or is not covered under the terms of your policy.
“Knowing what you actually do owe versus what you may not is important in negotiating medical debt,” explains Chantel Grant, an expert in dealing with unfair debt related lawsuits. “The one thing you don’t want to do is ignore the debt as those bills will keep coming and without addressing the debt you could take a significant ding on your credit score or, worse, face an ugly debt lawsuit.”
As far as how the debt will affect your credit rating, you have 180 days from the time you get the bill before it becomes “delinquent” and thus goes against your credit score. So you have six months before your future starts to get troubling. That gives you time to find a payment plan that works for you or seek a consumer protection law firm to help sort out the negotiating process.
Here are some advice points to consider to get the runaway debt train back on the tracks.
1 – Concoct a Payment Plan
In the medical field, there’s always room for negotiating, especially when it comes to creating a payment plan. If you can’t afford to pay all your bills at once (and, if you could, well, you wouldn’t be in debt), then work with your doctors or medical staff to come up with a payment plan. Be sure to make it something you’re confident you can stick to over the course of however many months it will be in effect.
Be wary of any hidden or additional fees associated with your plan. You certainly don’t want an increased interest rate which then means you’ll be paying more over time.
2 – Negotiate On Your Behalf
When all else fails and even before contacting a debt lawsuit specialist, try the DIY, self-negotiating plan.
Study your bills for errors or overcharges. Talk with your insurance provider about the best plan of attack for fighting back. It’s good to know that when medical bills do get thrown into a collections scenario, many debt collectors will settle for a fraction of what they think is owed.
And expenses to decide from a negotiating point of view how much you could pay back each month and over what period of time (assuming income and expenses remain fairly fixed in your household).
It’s always good to fight for your own rights when you can, knowing that nothing ventured, nothing gained. If self-negotiating isn’t successful and the debt collectors are standing firm, there are many consumer protection agencies like the GM Law Firm ready to intercede on your behalf and help get the debt resolution you deserve.
3 – Look Into a Medical Credit Card
Medical credit cards are a good option for those who want a specific card designed only to attack a variety of medical bills – from hospital visits to dentists and so on. The nice thing is that the interest rates on a medical credit card is generally deferred meaning that so long as you pay the balance with a predetermined time frame (usually six months to a year), then there will be no interest.
Do, however, read the terms carefully as if you don’t meet the balance in the negotiated timeframe interest rates will kick in and can often be higher than an everyday credit card.
If you cannot secure a medical credit card, try finding an everyday card that offers 0% interest. The key with that kind of card is having better-than-average credit and the ability to pay off the charged fees before the 0% interest period expires and the high interest begins.
4 – Medical Loans
Personal loans can be more beneficial than the previous two options for those with higher-than-average medical bills, usually upwards of six figures or more. If you do qualify for the loan your interest rates should be more reasonable than the penalties assessed by missing the deferred interest time frame of a medical credit card, for example.
As with any loan, understanding the differences between loans and gaining a great understanding of the terms before you sign on the dotted line to make your payments and pay-off period is suitable to what you can afford.
5 – Hire a Medical Billing Advocate
A medical bill advocate is an entirety that can help negotiate for you directly with the medical billing companies, hospitals, etc. While an advocate is generally expertly trained at how to read and understand medical bills and can quickly suss out if there are discrepancies.
If they can find errors or dubious charges they can easily guide you as to where to fight. They don’t come inexpensive. Medical bill advocates can charge high hourly fees, often up to $100 per hour or take a percentage of what they save you. In that scenario the 25-35% charge against your savings might end up being a wash in the long run.
6 – Apply For an Income-Driven Hardship Plan
For those with a low income, there hardship plans available specific to the medical industry. In such a plan if you qualify, payments can be broken up into the most reasonable for each individual’s particular situation and financial position.
Your provider or medical debt legal firm can guide you through the options and how to best apply for such a plan.