Medical debt research
- 1 MEDICAL DEBT - RESEARCH
- 1.1 Background
- 1.2 Market Overview
- 1.3 Political Overview
- 1.4 Organizing Landscape
- 1.4.1 Overview:
- 1.4.2 Free Care and Assistance
- 220.127.116.11 Free and Charitable Clinics:
- 18.104.22.168 Financial assistance with prescription drug costs
- 22.214.171.124 Financial assistance with medical equipment
- 126.96.36.199 Patient Assistance Programs - general
- 188.8.131.52 Patient Assistance Programs - targeted
- 184.108.40.206 Legal assistance for medical debtors:
- 220.127.116.11 Medical Bill / Consumer Advocates:
- 18.104.22.168 Financial assistance for medical debtors
- 1.4.3 Single-Payer Organizations
- 22.214.171.124 Existing Groups/Organizations for Single Payer- Medical Organizations
- 126.96.36.199 Existing Groups/Organizations for Single Payer- Political Organizations
- 188.8.131.52 Existing Groups/Organizations for Single Payer - Civic/Community Organizations
- 184.108.40.206 Existing Groups/Organizations for Single Payer - Faith Organizations
- 220.127.116.11 Existing Groups/Organizations for Single Payer - Unions
- 18.104.22.168 Existing Groups/Organizations - Medical Debt Focus
- 1.4.4 Existing Resources:
- 1.4.5 Resistance/Management Tactics (Debt buying):
- 1.5 Legal Regulatory Landscape
- 1.6 References and Resources
- 1.7 FAQs:
- 1.8 Glossary
- 1.9 Power Map
MEDICAL DEBT - RESEARCH
- U.S. spends more on healthcare than any other nation, including those with universal healthcare programs, 47.8% on national insurance plans (Medicaid, Medicare, Veterans Administration), 6.4% on private insurance for public employees, 10.1% on tax subsidies to healthcare. ()
- 25.3 % of hospital expenditures in the U.S. are administrative, higher than the Netherlands, England, Scotland, Canada, Wales, or France. ()
- Despite high government spending, high costs put burden on individuals:
- Healthcare spending was $10,348 per person in 2016, with private health insurance costs at $1,123.4 billion and out-of-pocket expenses at $352.5 billion and prescription drug spending increasing to $328.6 billion. The largest share of spending behind government is from households. ()
- Prescription drug costs are higher in the U.S. than any other nation because of name-brand companies holding monopoly rights awarded by the FDA and private patents on their drugs. () This is further influenced by the pharmeceutical marketing industry: in 2012 alone the industry spent $27 billion on drug promotion, $15 billion of which was face-to-face with physicians and pharmacies, and $3.1 on direct-to-consumer advertising. Direct-to-consumer pharmaceutical advertising is illegal in several countries. ()
Debt (will expand)
- Past due Medical Debt in the United States nationally and broken out by state can be found thru the Urban Institute data visualization. The larger study can be read here . (I will summarize and add to the FAQ section below this weekend)
- Demos White Paper (will add below this weekend) 
- KFF Report 
- Debt Cancellation Startup: 
- RIP Medical Debt 
Random Facts about Hospital Funding
(an ongoing place to ask an MD. PhD student doing work on health systems? an attempt to get a picture of where the money is/goes)
County Hospitals Vs Private Hospitals
- In Ohio the biggest difference from the County (public hospital) and the private one was that county hospitals get Medicare funding. But all hospitals get funding from all different kinds of places. Medicare funding that I mentioned was to support residencies (not all hospitals have residents) He doesn't think there's a huge difference in terms of "public" vs "private" hospitals in terms of their funding, except that "public" hospitals get some (usually small) portion from either the county, the city, or some other public entity. Usually public hospitals don't discriminate in terms of seeing patients based on ability to pay, but in my friend's anecdotal experience they still 100% do that (though no hospital can refuse you care if you're dying and show up there because of a law called EMTALA)
- Different hospitals can contract out for all kinds of things. Some contract out for things like hospital flights for badly injured patients, others contract out their food services or janitorial services, stuff like that. This is also affected by local labor laws surrounding certain services. (Example: security services are contract out under prevailing wage labor laws)
- My friend's best guess is that it's all highly dependent on the market that they're in and whether it makes sense to bring certain labor-sections in-house
- @Oliver's Comment on ambulance services: Ambulances are totally different/weird animals apparently. They're (usually) privately owned companies that do their own thing re debt collection and setting costs
- FINALLY The crazy thing about hospitals that I found is that they set their own costs. Because they cannot refuse care if you are uninsured or can't pay, they shift the cost onto other people who can. SO that's why an Advil costs like $90 on a hospital bill or something crazy exorbitant. An insurance company will negotiate with the hospital so depending on your plan/insurance the insurance company has negotiated to only pay a certain amount for a procedure. In many ways hospitals set the cost because a HUGE problem with driving the medical debt in the United States (according to my friend) is that everything just costs too much and the prices are not set in an intelligent way.
- See the Social Transformation of American Medicine (according to my friend)
- See Uwe Reinhardt's "It's the Prices Stupid" 
- Prosper Healthcare Lending
Bond Market And Securitizations
- In general, this site seems to have many, many articles on healthcare policy that are probably worth looking into further: 
- Expanding Medicaid reduced unpaid medical debt 
- "Insurance is most fundamentally about giving people financial protection from the risk of needing costly health care that could otherwise overwhelm their personal finances. The landmark Oregon Medicaid experiment that took place before the ACA was enacted found that gaining Medicaid led to large reductions in catastrophic out-of-pocket medical expenditures and improvements in other financial outcomes. However, we know little about the effect of the ACA's Medicaid expansions on financial outcomes, in part because data on financial outcomes are less accessible for researchers than publicly available data on health insurance and access to care. A suggestive bit of evidence is that the national rate of personal bankruptcies, which can be driven by medical debt, have fallen since the passage of the ACA."
- The case for single payer 
- "Single-payer  is a very different model. By making the federal government the country's health insurer, it would make it possible to bring down costs while ensuring everyone gets the high-quality care they need - especially those people the market deems "unprofitable." It would reshape the relationship between industry, the state, and patients - laying the groundwork for genuine health justice."
- There are (some) legitimate critiques of the Affordable Care Act 
- "In the case of ObamaCare plans, a lot of routine medical expenses are covered in full as part of the scheme's "essential health benefits" -- a politically crafted list of favored medical services that Washington mandates. To accommodate full coverage of these routine costs, the plans skimp on access to doctors and drugs, and saddle consumers with high out of pocket costs on mostly catastrophic medical bills."
Federal Elected Officials
- Vermont Senator Bernie Sanders 
State Elected Officials
Municipal Elected Officials
- Medical debt is the No. 1 reason consumers report being contacted by a collections agency ()
- 59% of those contacted by a debt collector said it was for medical services
- Unlike other types of debt, people with medical debt were prevalent across a range of income levels, credit scores and ages
- Medical debt is the No. 1 source of personal bankruptcy filings in the US - and most filers had health insurance. The problem of underinsurance has only grown since the ACA was implemented in 2010.
- Even though post-ACA the US has the lowest rate of un-insurance in our lifetimes, the majority of Americans who get their insurance through work are facing an escalating crisis of underinsurance: (FAIR) 
- The ACA imposed an excise tax on their benefits, the simple threat of which caused 73 percent of employers to cut benefits, raise out-of-pocket costs or make plans to do so. 
- Their premiums went up more than 3 times faster than inflation .
- Their deductibles increased 89 percent, while their compensation went up just 14 percent, and more than a third of workers carries deductibles of $1,000 or more. 
- 31 percent of Americans told Gallup they either skipped or delayed necessary medical care last year because of costs, the majority for serious conditions. 
- The Census Bureau reports that 11.2 million Americans live in poverty due to out-of-pocket medical expenses. 
- The primary driver of medical debt is the extremely high cost of healthcare - providers, hospitals, drugs, medical devices and equipment, lab tests, etc. - in the US system, which "seems optimally designed for rent seeking." (Nobel Prize winner Angus Deaton). (. FAIR reports:[http://fair.org/home/the-sickness-of-american-healthcare/
- Healthcare providors have been on a 20-year merger spree.  Now they're charging monopoly prices for both hospital  and physician care  .  .
- Drug companies are gaming patent law and charging monopoly prices, refusing to reveal any justification for their larcenous prices. 
- Like drug companies, medical-device companies routinely insert clauses in their sales contracts prohibiting hospitals from sharing information about prices and discounts. Physicians, who routinely receive substantial compensation from medical-device companies through stock options, royalty agreements, consulting agreements, research grants, fellowships, and even outright ownership stakes, are incentivized to contract with partner firms and saddle their patients with inflated bills.
- Insurance companies are passing provider and drug prices to their ratepayers and skimming billions of dollars off the top of an ever-growing pie. 
- Healthcare is the ultimate sellers market. As the market power of hospitals grows, insurers are losing leverage in price negotiations. And the biggest single buyer, Medicare, is restricted from even trying to negotiate prices for drugs or durable medical equipment. (Brill)
- More and more, hospitals' chargemaster rates are serving as the starting point for pricing negotiation. Brill observes: 
- "However, no matter how steep the discounts, the chargemaster prices are so high and so devoid of any calculation related to cost that the result is uniquely American: thousands of nonprofit institutions have morphed into high-profit, high-profile businesses that have the best of both worlds. They have become entities akin to low-risk, must-have public utilities that nonetheless pay their operators as if they were high-risk entrepreneurs. As with the local electric company, customers must have the product and can't go elsewhere to buy it. They are steered to a hospital by their insurance companies or doctors (whose practices may have a business alliance with the hospital or even be owned by it). Or they end up there because there isn't any local competition. But unlike with the electric company, no regulator caps hospital profits."
- The healthcare industry has the means and the will to keep costs - and their profits - soaring. "According to the Center for Responsive Politics, the pharmaceutical and health-care-product industries, combined with organizations representing doctors, hospitals, nursing homes, health services and HMOs, have spent $5.36 billion since 1998 on lobbying in Washington…the health-care-industrial complex spends more than three times what the military-industrial complex spends in Washington." (Brill )
Organizing around the problem of medical debt takes many forms. It focuses on different stages or aspects of the problem - and solution.
- Charity care
- Free & Charitable Clinics
- Patient Assistance Programs
- Medical bill / consumer advocacy
- Legal assistance for medical debtors
- Financial assistance for medical debtors (fund-raising, debt buying)
- Education and Action Against Medical Debt
- Single-payer / Medicare-for-All advocacy
- As the momentum for Medicare-for-All grows, corporate healthcare interests -- including those within the Democratic party -- are mounting “reform-ish” campaigns to forestall any radical overhaul of our current profit-driven system. Jeff Bezos, Warren Buffett and Jamie Dimon have announced plans for an “undertaking of great advantage” to “innovate” in healthcare (Naked Capitalism, 5/5/2018). And there’s a new bipartisan, nonprofit advocacy group called the United States of Care, described as “a collaboration of insurance executives, superpowerful healthcare providers, Republican lawmakers, and figures included mainly to lend it some veneer of credibility, like chronicler of American health Atul Gawande, led by ostensibly well-meaning Democrats who had banked on positions in a Clinton administration and now need paychecks to pay their own insurance premiums” (Splinter, 2/8/2018; FAIR, 2/16/2018).
Free Care and Assistance
Charity care is healthcare provided for free or at reduced prices to low income patients. In exchange for their tax-exempt status, nonprofit hospitals are obligated to provide financial assistance to lower-income patients. However, some for-profit hospitals provide as much charity care as some non-profit hospitals. A McKinsey/Bank of America survey found: "the 2,900 nonprofit hospitals across the country, which are exempt from income taxes, actually end up averaging higher operating profit margins than the 1,000 for-profit hospitals after the for-profits' income-tax obligations are deducted. In health care, being nonprofit produces more profit." (Brill) 
The ACA created new community-benefit requirements for tax-exempt hospitals:
- develop written policies regarding emergency medical services and financial assistance for patients eligible for free or discounted care
- limit charges to patients who qualify for financial assistance to the amount charged to insured individuals
- observe fair billing and debt collection practices
- conduct periodic community needs assessments.
Additionally, states have their own laws governing hospital community benefit, financial assistance, billing, and collection. Consumer protections in some states exceed federal mandates, while at least 11 states have no laws regarding community benefit requirements., (For example. New York's Hospital Financial Assistance Law, aka Manny's Law, is relatively strong: hospitals are expected to enroll individuals or households at or below 300% FPL residing in NY, regardless of immigration status.)
- Go to hospital website page on Charity Care or Financial Aid/Assistance for a description of its program/policy
- Most drug makers and medical-device manufacturers have similar aid programs (see below)
Free and Charitable Clinics:
- National association of Free and Charitable Clinics 
- Community Catalyst/Hospital Accountability Project: Free Care Compendium - summarizes the free care laws and regulations in each of the 50 states 
- EyeCare America  - Volunteers provide eye care to people at risk for glaucoma, senior citizens, children, and people with diabetes
- New Eyes  - free eyeglasses
- Mission Cataract USA  - free cataract surgery
- Vision USA  - free eye exams
Financial assistance with prescription drug costs
Most pharmaceutical companies have their own charity programs, which are typically described on their websites
Financial assistance with medical equipment
Most equipment/device manufacturers have their own charity programs, which are typically described on their website
- GoodHealthWill 
- Reused and Exchanged Equipment Partnership (REEP) Online 
- The HIKE Fund  - hearing devices for children
Patient Assistance Programs - general
- Benefits CheckUp 
- HealthWell Foundation 
- Patient Advocate Foundation 
- Patient Access Network (PAN) Foundation 
- Patient Services Inc. 
- United Way  - does not provide direct assistance, but gives referrals to local charities
Patient Assistance Programs - targeted
- CancerCare 
- Caring Voice Coalition  - chronic and rare diseases
- Colburn-Keenan Foundation  - bleeding disorders
- Epilepsy Foundation 
- Good Days  (formerly Chronic Disease Fund) - cancer/chronic diseases
- Hearing Loss Association of America 
- Heather Pendergrast Fund  - children of Volunteer Firefighters/EMS on Long Island
- Hemophilia Foundation of America - Helping Hands Program 
- Huntington's Disease Assistance Fund 
- Josh Provides Epilepsy Assistance Foundation 
- Leukemia & Lymphoma Society - LLS Co-Pay Assistance 
- Lymphoma Research Foundation Patient Aid Grant Program
- National Gaucher Foundation - CARE Program 
- National Organization for Rare Diseases 
- United Healthcare Children's Foundation 
Legal assistance for medical debtors:
- State and local bar associations - many have programs/projects focused on medical debt
- Alleghany County Bar Association 
- New York City Bar Justice Center 
- CLARO - Civil Legal Advice and Resource Office 
- Provides free legal advice to unrepresented debtors (being sued by debt collectors) in NY
- State-funded, based in the courts, there may be similar programs in other states
- National Credit Union Foundation  
Medical Bill / Consumer Advocates:
- Alliance of Claims Assistance Professionals 
- Patient Advocate Foundation 
- Fair Health Consumer 
- Medical Billing Advocates of America 
- The Access Project - Medical Debt Resolution Program
- Community Catalyst/Hospital Accountability Project: Free Care Compendium - summarizes the free care laws and regulations in each of the 50 states 
Financial assistance for medical debtors
- Better (tech startup putting 100% of revenue for a limited time toward medical debt relief)  
Existing Groups/Organizations for Single Payer- Medical Organizations
- American Association of Community Psychiatrists (AACP)  (AACP)
- American Medical Association - Medical Student Section  (AMA-MSS)
- American Medical Student Association  (AMSA)
- American Medical Women's Association  (AMWA)
- American Nurses Association  (ANA)
- American Public Health Association  (APHA)
- California Nurses Association/] National Nurses United/ (CNA, NNU)
- Falls City Medical Society, Kentucky
- Health Care for the Homeless, Inc 
- Kentucky Psychiatric Medical Association
- Latino Medical Student Association (LMSA)  (LMSA)
- National Association of Social Workers (NASW)  (NASW)
- National Health Care for the Homeless Council  (NHCHC)
- National Medical Association  (NMA)
- Puerto Rican College of Physicians and Surgeons
Existing Groups/Organizations for Single Payer- Political Organizations
- Democratic Socialists of America 
- Progressive Democrats of America
- U.S. Green Party
- Colorado Democratic Party
- Woolwich, Maine Democratic Committee
- Single-Payer Action Network (SPAN), Ohio
- Chester County Pennsylvania Democratic Committee
- Meyerland Area Democratic Club , Houston, TX
- West University Area Democrats, Houston, TX
- Democratic Party of Milwaukee County
- Skagit County Democratic Party
- Butte-Silver Bow County Democratic Central Committee, MT
Existing Groups/Organizations for Single Payer - Civic/Community Organizations
- Americans for Democratic Action 
- American Library Association (ALA) (ALA)
- Amnesty International 
- City of Richmond Commission on Aging
- Consumer Federation of America  (CFA)
- Consumers Council of Missouri 
- Consumers Union 
- Forward Equality
- Human Rights Justice Forum
- League of Women Voters (LWV)  (LWV)
- National Family Farm Coalition (NFFC)  (NFFC)
- National Council of Senior Citizens
- Older Women's League  (OWL)
- Our Bodies, Ourselves
- Results 
- The U.S. Conference of Mayors 
- US Public Interest Research Group  (USPIRG)
Existing Groups/Organizations for Single Payer - Faith Organizations
- Assembly of the Urban Caucus of the Episcopal Church
- General Board on Global Ministries of the United Methodist Church
- Presbyterian Health, Education and Welfare Association of the Presbyterian Church (USA)
- Church Women United
- Social Justice and Ministry Committee of Saint John the Baptist Parish, Collegeville, MN
- Unitarian Universalists Association of Congregations
Existing Groups/Organizations for Single Payer - Unions
- Unions for Single-Payer Health Care 
- HR 676 has been endorsed by 635 union organizations.
- Endorsers include 156 Central Labor Councils and Area Labor Federations and 44 state AFL-CIO's (KY, PA, CT, OH, DE, ND, WA, SC, WY, VT, FL, WI, WV, SD, NC, MO, MN, ME, AR, MD-DC, TX, IA, AZ, TN, OR, GA, OK, KS, CO, IN, AL, CA, AK, MI, MT, NE, NY, NV, MA, NJ, RI, NH, ID, & NM).
The following 22 international/national unions have endorsed HR 676:
- UA (Plumbers & Pipefitters)
- AFM (Musicians)
- CSEA (California School Employees Association)
Existing Groups/Organizations - Medical Debt Focus
- Champaign County Healthcare Consumers - Community Coalition on Medical Debt
- Launching a Medicare for All Campaign - A DSA Organizing Guide 
- Universal program, no means testing
- Comprehensive coverage
- Free at point of service, no cost sharing
- All residents covered (not just citizens)
- Jobs program
- Fighting Back Against Medical Debt - DSA Socialist Feminist WG Training
- National Credit Union Foundation - Medical Debt Toolkit 
- According to the American Medical Association 20% of medical claims are inaccurately processed by health insurers.
- The Wall Street Journal in an article titled "How to Fight a Bogus Bill", reported the following statistics.
- Stephen Parente, a professor of health finance at the University of Minnesota who has studied medical billing extensively, estimates that 30% to 40% of bills contain errors.
- The Access Project, a Boston-based health-care advocacy group, says it's closer to 80%.
- Medical-billing errors mar the credit reports of roughly 14 million Americans, according to a December study by the Commonwealth Fund.
- According to a 2010 study by the Federal Reserve, medical bills account for more than half of all debts in collection.
- A Quicken Health survey found that almost one third of Americans let a medical bill go to collections because they did not understand the bill or explanation of benefits statement.
- Roughly 38 percent of Americans with employer-sponsored health insurance had a deductible of $1,000 or more in 2013-up from 10 percent in 2006, according to the Kaiser Family Foundation.
- According to the Medical Group Management Association, multi-specialty practices saw his/her bad debt (money they are owed, but couldn't collect) go up by 14 percent between 2008 and 2012. Because that number is increasing, health providers are changing the way they process payments, some medical offices have reduced the amount of time they wait until going to collection agencies, while others expect to be paid up front before they perform a procedure.
- Another issue that leads to medical debt is a lack of price transparency in health spending. It is nearly impossible for consumers to know upfront how much they are going to have to pay for a particular procedure. According to a survey conducted by Harris Poll7 on behalf of NerdWallet Health, 73% of adults said if they knew the cost of medical care before receiving a treatment, they could make better health decisions.
- Much of this data was confirmed by the Consumer Financial Protection Bureau's (CFPB) December 2014 Report - "Consumer credit reports: A study of medical and non-medical collections." Research performed by the CFPB demonstrated that credit scoring models that treat medical collections in the same way as other collections penalize consumers with medical debt collections by underestimating his/her creditworthiness with lower scores. The study found that consumers with medical debt were more likely to pay his/] her future loan obligations on par with consumers scoring at least ten points higher. In cases where the consumer's medical debt was paid off, the scores underestimated the consumer's creditworthiness by an average of 22 points.
- New York City Bar Justice Center "Know Your Rights" - Medical Debt 
- NY Legal Aid Society -- Guide to Medical Debt: 
- Bitter Pill: Why Medical Bills are Killing Us, Stephen Brill, Time, 2/20/2013 
- This PNHP FAQ points to many of the arguments / misconceptions about single payer 
Resistance/Management Tactics (Debt buying):
- RIP Medical Debt 
- Minnesota Nurses Association
- Michigan Nurses Association
Legal Regulatory Landscape
Current Regs And Laws:
- Fair Debt Collection Practices Act 
SEC Regulations (Securitizations):
Current Federal Laws:
- ECOA (Equal Credit Opportunity Act): The Equal Credit Opportunity Act (Ecoa) Prohibits Discrimination In Consumer Lending By Race Or Gender Or Other Protected Classes. It Does Not Prohibit Discriminating Against Poor People Though. That Always Seems To Be Legal.
- TILA (Truth In Lending Act): The Truth In Lending Act (Tila) Is A Big Bill That Requires Lenders To Disclose Certain Facts About Loans, Creates A Standard Way To Calculate Interest Rates, And Regulates Other Aspects Of The Lending System.
- FCTA (Federal Trade Commission Act): The Federal Trade Commission Act (Ftca) Contains A Provision Prohibiting "Unfair And Deceptive Acts And Practices" (Commonly Called "Udap" Or "Consumer Fraud"). This Is The Baseline Protection Against Creditors Misleading You Or Engaging In Other Shady Behavior.
- CFPA (Consumer Financial Protection Act): The Consumer Financial Protection Act (Cfpa) Added Protections To The Ftca.
- Bankruptcy: Bankruptcy Laws Are Federal Laws.
- ACA Provisions on "Surprise Billing"
Current State Laws:
New York Laws (most comprehensive in the country)
- NYHFAL 
- New York's Hospital Financial Assistance Law (HFAL) of 2007,patients whose income is at or below 300% of the Federal Poverty Level (FPL) may not be charged more than the hospital would charge a health plan
- New York's Surprise Billing Law (2015) 
- Dispute Resolution Process (NY Law)
Proposed Laws And Regs:
- National Consumer Law Center's Model Medical Debt Protection Act 
- Sen. Sherrod Brown (D-OH) introduced the End Surprise Billing Act in the House in 2/2017 to amend Medicare to require Hospitals to follow certain additional guidelines in order to end surprise billing. Unlike ACA provisions, this relieves patients of all liability.
References and Resources
Frequently Referenced Statistics
- 62% of personal bankruptcies in the U.S. are linked to illness and health care costs.
- Average amount of medical debt in collection: $579 Median: $207
- 52% of all collection accounts on credit reports are medical.
- An estimated 43 million consumers with a credit report at a nationwide consumer reporting agency have one or more medical accounts in collection.
- 19.5% of credit reports - nearly one in five - contain one or more medical collections tradelines
- Among medical debtors, hospital bills were the largest medical expense for 48%, drug costs for 19%, doctors' bills for 15%, and insurance premiums for 4%. 
- Every year, forty five thousand people die from preventable deaths because of lack of health insurance. 
- 14% of all debt complaints received by the CFPB are medical debt (USPIRG Report)
- Demos Fact Sheet 2009: 
- Families USA 2009: 
- Community Catalyst FAQ on ACA: 
- Excellent FAQ on Single Payer aimed at Physicians: 
Explainers / Infographics:
- DROM Medical Debt Chapter: 
- CFPB Study of Medical Collections (2014): 
- Families USA (2009) "A Consumer's Guide to Coping with Medical Debt": 
- USPIRG on Medical Debt: _US_%281%29.pdf
What should I do if I receive a medical bill?
- If you don't recognize the provider, check the date of service to see if you had a medical treatment on that day. For more complicated procedures, ask for an itemized bill from the provider in order to check how much you were charged for each service. Some providers who bill you directly may have been associated with a hospital where you were treated, so you may not have known you were receiving services from them at the time you were being treated. If you have verified you owe the bill, try to resolve it right away. Verify whether an insurer is paying for all or part of a bill. ()
What if I need to dispute a bill?
- Send a written notice to the provider and include a copy of all relevant documents, such as records from doctors' offices or credit card statements. Do not send original documents. If you don't owe the bill, act quickly to dispute it. If you delay the bill and let it end up in collections, it can have a significant impact on your credit score. ()
Can I get financial assistance or support to pay my medical bills?
- Many hospitals have financial assistance programs, which may be called "charity care," if you are unable to pay your bill. Check the deadlines, which can vary. ()
Can my family be held responsible for paying my medical bills?
- Generally speaking, while you are alive, your relatives are not responsible for paying any debts you may have incurred, that they did not cosign. But there can be many, many exceptions to this rule - spouses may be responsible for each other's medical debts depending on the state they live in. Your relatives shouldn't have to deal with debt collectors  trying to contact you. And under the Fair Debt Collection Practices Act (FDCPA), creditors aren't even supposed to talk to your relatives, friends or neighbors about your debts.
- You are not liable for the debts of any family member, with the exception of your spouse, and even in that case the obligations may be limited. No one has an obligation to pay the debts of a deceased person who was not their spouse. And even a spouse's obligation may be limited under state probate law. ()
Will my insurance cover all of my medical bills?
- Probably not. Even if you have private medical insurance, there are often limits or restrictions to your coverage. In fact, almost 80 percent of people who file bankruptcy because of medical bills are insured. There may also be complications with filing that could leave you stuck with the bill. For example, if your insurance company is slow in paying, then creditors could come after you and your credit score could take a hit. ()
How much medical debt do you need before you can file bankruptcy?
- You can file bankruptcy for almost any amount of debt if you are unable to pay. As of 2009, the average person with medical insurance who files medical bankruptcy owes more than $17,000 in medical bills. For the uninsured, the average debt is about $27,000. If you suffer from neurological disorders, the average debt is more than $34,000. ()
Do people really file bankruptcy because of medical bills?
- Absolutely. About 60 percent of all bankruptcy filings are related to medical bills. The nature of illness and injury also means that all types of people seek the help of bankruptcy in dealing with their medical debt. Of all people filing for medical bankruptcy:
- 60 percent went to college
- 66 percent own their home
- 20 percent of families included a military veteran or active-duty soldier* ()
- OUTDATED: Statistics from a 2009 Harvard University report on medical bankruptcy study .*
Can unpaid medical bills affect my credit score?
- Yes. If your medical bills go unpaid your hospital or doctor's office could turn the bills over to a debt collection agency. This agency can file a report with the credit monitoring services and your credit score will take a hit. Collection agencies may begin calling your house or sending letters in efforts to collection. ()
What if I pay off my medical bills with a credit card?
- If you can't immediately pay off a high debt on your credit card bill, you will be charged high interest, and it will look like regular debt to other creditors. Instead, ask your medical provider for a payment plan with little or no interest. ()
- Because of credit card interest rates, fees and penalties, putting your medical bills on a credit card could cause the amount you owe to increase. So while you might get rid of your medical bill problem, you would now be faced with a larger total debt, only now it's on your credit cards. ()
Can I negotiate with my doctor to reduce my medical bills?
- Maybe. Some doctors and hospitals will offer to put you on payment plans or even reduce your bills. But if your bill has already gone into collection then it may be too late. Also, it will be up to you to negotiate and try to work out a deal. Some large hospitals or health care groups may not negotiate. ()
- Hospitals may negotiate the amount of the bill with you. The tab may be reduced if you pay the whole amount up front. You can also try asking for the rate that people who have insurance get. The hospital might also offer a plan that enables you to pay off the debt in installments at no interest. It doesn't hurt to ask. ()
How is medical debt classified?
- Medical debt is considered unsecured debt, and, as such, may be included and eliminated in Chapter 7 bankruptcy. Credit card debt, personal loans and payday loans are also considered unsecured debt. ()
- Chapter 7
- Chapter 13
- Unsecured Debt
- Surprise Billing (1/3rd of all medical debt is because of this practice by HCPs)
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