The amount of medical debt per capita in the United States has dropped over the last few years, but 30% of the population still have unpaid medical bills.
The average medical debt is $1,800, but that amount is owed by roughly 50 million American citizens. What this means is that right now there’s $90 billion in medical debt which healthcare facilities and hospitals are actively pursuing repayment for.
Medical debt is rarely deliberate, because nobody knows when they’re going to become ill. An unexpected medical bill might only cost $1500, but when 57% of Americans have less than $1,000 in savings a minor medical emergency can quickly become a major financial issue.
So, what can you do if you find yourself facing a small mountain of medical debt?
Does Your Insurance Cover It?
These types of mistakes happen all the time, so it’s quite possible that some or all of your medical bill is actually covered by your health insurance, if you have any. Call your insurance provider to check what your coverage is, explaining your situation to them. They might not be able to reduce the bill to zero, but they’re trained to spot issues with medical billing.
If you don’t have any health insurance then your next step is to examine your bill in more detail.
Is the Bill Correct?
Medical billing systems are computerized, so it only takes one incorrect billing code to artificially inflate the final total on your medical bill. You should ask for an itemized bill if the amount seems excessive in relation to whatever medical assistance you required. Sometimes it can be as simple as being charged for your room when you’d already been discharged.
Another option is to have your bill examined by a medical advocate – they basically analyze every aspect of your bill to make sure it’s not only correct, but legal. There’s the possibility that you’ve become victim of something called “predatory medical billing”, and a medical advocate is trained to spot this type of error.
Pay It Down
Your healthcare facility actually do want to get paid by you, because sending debt collectors after you is expensive, time consuming, and they usually only recoup cents on the dollar of the total debt owed to them.
Ask if the healthcare facility or hospital has a payment program of some kind. If they do then work with them to come up with a repayment plan that won’t financially cripple you, but that still allows you to pay off your debt in a timely manner.
Declare Bankruptcy
In the above situations, the amount of debt being discussed is quite small, probably to the tune of a few thousand dollars. If, however, you’ve been ill for a prolonged period of time you may already have medical debt in the tens or hundreds of thousands of dollars. The only real choice you have available to you at that point is to declare bankruptcy.
Filing for Chapter 13 bankruptcy means you’ll have to repay the debt as part of your repayment plan, whereas a Chapter 7 filing will usually result in all your medical debts being discharged.
Declaring bankruptcy isn’t a choice you should make lightly, so always consult with an experienced bankruptcy attorney before making any potentially life-changing decisions.