Layin’ It on the Line: 5 tips for managing medical debt
Medical debt is becoming a huge issue for many Americans. A recent study found that one in four people have struggled to pay their medical bills in the past year.
Medical debt is also the leading cause of personal bankruptcy in the United States. The problem is only worsening as health care costs continue to rise. Many people may be forced to choose between paying for their medical bills and other essentials like food and shelter, which no one should make.
Legislators are working to find new ways to make health care more affordable. Still, progress varies significantly from state to state, and many states disagree with national health care policies. While steps are being taken to rework the current system, it is vital to have a basic understanding of the protections you are afforded in your own state and the preventive measures you should be taking to protect yourself.
How does Utah compare to other states when it comes to the legal side of things?
A recent report by Innovation for Justice ranked Utah 36th out of 50 states on its medical debt policy scorecard. Innovation for Justice is a social justice innovation lab based at the University of Arizona.
The medical debt policy scorecard is a tool that the public can use to assess state laws and regulations regarding medical debt. The scorecard ranks states based on several factors, including whether they have laws prohibiting creditors from using aggressive collection tactics, such as wage garnishment, and laws requiring creditors to disclose the rights of consumers with medical debt.
Debt collection lawsuits are the most common type of civil litigation, and medical debt comprises the majority of debt collection lawsuits nationally. More than 70% of these lawsuits end with a financial judgment against the medical user, which can mean wage garnishments, credit score damage and liens. These can mean loss of access to housing and employment. The Journal of the American Medical Association estimates the debt in total exceeds $140 billion.
Medical debt is particularly devastating because, unlike consumer debts, patients are unaware of the cost of services at the time they receive care. One lived-experience expert the researchers interviewed had several emergency room visits while uninsured and thousands of dollars in bills.
How can you avoid being buried by medical debt?
Understand your health benefits. Making sure you have health insurance coverage will be a deterrent against exposure to personal financial responsibility. A health insurance plan may cover most, if not all, of the cost of doctor visits, tests, and treatments. Make sure you fully understand deductibles and co-pays. Also important is to understand any exemptions from coverage and any requirements your insurer might have for seeing a specialist or specific surgical procedures.
Review your medical bills. Albeit tedious, take the time to inspect all medical bills before paying them. Mistakes can be made, including bills for treatment never received or billing code errors that may cost you more than the actual service you received.
If your insurance company denies your claim, file an appeal. You have the right to go through the appeals process before you face the medical expense personally. It can be frustrating when a claim for an expensive service is denied, but that’s no reason to give up trying.
Negotiate treatment costs. Because of agreements, medical providers may charge different fees to insurance companies than they would an individual. Often, your medical provider may make allowances on fees. If you know you will be paying for a medical expense out of pocket, notify your provider and attempt to negotiate the price.
Request a payment plan. When faced with medical bills that you don’t have the ability to pay, request a payment plan with the medical provider. Many medical offices may be able to help with a payment plan that works within your budget limits.
It’s important to handle your medical bills promptly and efficiently so you can manage your medical expense exposure.
Lyle Boss is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management. Boss Financial, 955 Chambers St., Suite 250, Ogden, UT 84403. Telephone: 801-475-9400.