According to a recent survey in the American Journal of Public Health, almost 60 percent of Americans who have filed for bankruptcy cited medical bills as “very much” or “somewhat” responsible for their bankruptcy. That was more than chose student loans or home foreclosure as a cause.
Sadly, this isn’t exactly new news; we’ve known for some time that uncovered medical expenses can easily become crippling financially.
- In 2016, a study found that a third of cancer patients went into debt for their treatment and 3 percent filed for bankruptcy protection.
- A 2014 study by the Consumer Financial Protection Bureau indicated that the most common type of unpaid bill sent to collection agencies are medical bills.
All told, about 20 percent of Americans currently have an overdue medical bill.
Things might get worse
The rate of people with no health insurance is rising, and some insurance available through the Affordable Care Act covers only certain expenses. Even those with “good” insurance are often on high-deductible plans, which puts a heavy burden on sick people to pay thousands of dollars out-of-pocket before getting any coverage. Plan networks are also shrinking, increasing the risk of out-of-network expenditures.
Are doctors and hospitals helping?
Some hospitals are required to provide care free of cost to uninsured, low-income patients. But even those patients often receive bills, according to a recent story in The Atlantic. When those bills go into collections, the debt collectors may not have the ability to forgive the debt. Even the poorest among us are getting billed, collected from and sued.
That’s also the case when doctors and hospitals sell unpaid debt to debt buyers. These collectors typically buy uncollected debts for pennies on the dollar, which only makes financial sense to medical providers because there are so many unpaid debts. Debt buyers don’t have any motivation and may lack the authority to reduce these debts.
Negotiation can sometimes help
In some cases, patients with unpayable medical bills can negotiate with the doctor’s office or hospital. Call and ask about financial assistance or charity care for the uninsured, if you don’t have insurance. Also, you can ask if you can pay the Medicare rate. Even if your debt is in collections, you can ask for a payment plan or a discount for paying a large portion of the debt at once.
Bankruptcy may be a good option
The good news is that medical bills are manageable or dischargeable through bankruptcy. The moment you file for bankruptcy, all collection efforts are halted until the bankruptcy process is complete. Depending on your situation, you could be granted a reasonable payment plan or have the debts wiped out completely. A bankruptcy attorney can explain what options you qualify for.