What About Medical Debt?

Reducing the Amounts Owed Through a Settlement

Medical debt plagues many families as they not only struggle to maintain their health but must also deal with the financial consequences of medical debt. A recent Kaiser Foundation survey reported that 53% of individuals without insurance and 20% of Americans with insurance suffered serious financial setbacks due to medical debt.

The study also concluded that 63% of families with outstanding medical bills exhausted most or all of their savings and 42% resorted to taking a second job to pay off the debt incurred due to medical expenses.

Medical Debt is Different from Every Other Kind of Debt

Lenders, credit bureaus, credit scoring agencies, and lawmakers separate medical bills from other forms of debt. A few of the key differences include:

Medical Costs: You rarely know the amount you owe before receiving a service. When you make a purchase on a credit card, buy a car or take out a mortgage you know exactly what you are getting and what you will owe. Medical debt often derives from emergencies. You may not know what procedures you need, what insurance will cover, and your obligation until weeks or months after discharge.

Hospitals Must Treat Everyone: The Emergency Medical Treatment and Active Labor Act (EMTALA) requires hospitals to treat all patients. Even if you have medical debt, the hospital must admit you in the event of an emergency.

Few Providers Use In-House Collections: Health care providers are not in the collection business. Most companies hire debt collection agencies to recover past-due medical debts.

How These Differences Allow You to Negotiate Medical Debt

Financial Assistance: You can apply for financial assistance to reduce out-of-pocket costs. When you find yourself with high medical bills, the first step is to see if you can reduce the amount you owe. Both doctors and hospitals will often reduce your obligation through financial assistance programs.

Limited Credit Reporting: All three major credit bureaus do not report any medical debts on your credit file until the late payments exceed 180 days or six months. Credit bureaus recognize the high number of billing errors, insurance disputes, and other problems with medical bills and give you time to make corrections before it affects your credit.

Difficult to Sue: Lawsuits are one of the primary ways debt collectors can force you to make payments on past due debt. When it comes to medical debt, consumers can argue that the debt is not reasonable. Hospitals and doctors charge different rates depending on whether you are insured, uninsured, or receive care through Medicare or Medicaid. These pricing differences open the door to a claim of ‘unreasonable charges.’ The courts often side with the consumer, making it harder for debt collectors to recover past due balances through legal channels.

How You Should Deal with Outstanding Medical Debts

Never Transfer Medical Bills to Another Form of Debt: Collection agencies will pressure you to pay the bill with a credit card or put it on an equity line of credit. Medical debt typically comes with no or low-interest rates and transferring the debt will lead to significantly higher costs. You will also lose the ability to apply for financial assistance, claim unreasonable charges, or reduce the bill through other means. By paying the debt through a secured line of credit like a Home Equity Line of Credit, you turn an unsecured debt into a secured debt which can jeopardize the asset, such as your home, should you become unable to pay the debt in full.

Settling Medical Debts

Collection agencies recovering medical debts understand the legal challenges of a medical collection account. As a result, debt collectors can be very aggressive in collection efforts. It also means that it is easier to negotiate debt balances, even if you do not qualify for financial assistance.

About Titan Consulting Group

Titan Consulting Group helps consumers evaluate various debt relief options and choose the right program that best fits their short-term and long-term financial goals. We work with consumers seeking debt consolidation loans, or who may be considering options like debt negotiation or bankruptcy. Through our network of partners, we can help you find the right solution to reach your goals and get back to living a life free from high interest credit card debt.

Contact us today at (888) 488-4517 or Apply Online now.