Guest Blog: by Aly J. Yale: Updated on 05.10.19
Credit and Debt
Home » Guide To Combating Medical Debt
Overwhelming medical debt is the No. 1 reason Americans file for bankruptcy. In fact, according to a study out of the City University of New York, 66.5 percent of bankruptcy filings cite medical expenses as a contributing factor.
These expenses often stem from unexpected emergency room visits or surgeries, costly bills after life events (the labor of a child, for example), or treatments for fertility or chronic illness. Regardless of their source though, they pose a serious financial burden for the everyday American.
Not only can costly medical debt make it difficult to pay household expenses, like rent, utilities and grocery bills, but getting behind on those bills can mean a lower credit score, a constant barrage of calls from collections agencies or, in dire situations, even a filing for bankruptcy.
Are your sky-high medical bills forcing you to consider bankruptcy? This guide can help you find medical bill assistance programs, walk you through the bankruptcy process and help get your credit back in good standing.
Dealing with Medical Debt
Having a solid emergency fund or Health Savings Account is vital in the event an unexpected medical cost arises. Unfortunately, most people don’t have these funds at their disposal. According to the Federal Reserve, nearly half of all Americans don’t have the cash to cover a $400 emergency expense. And many of those people said they’d need to finance the bill in order to pay it off.
If you’re currently without an HSA or flush emergency savings fund, it’s important you take steps to prevent unexpected medical costs where possible. To do this, call doctors and hospitals ahead of time to confirm they’re within your insurance provider’s network. You should also ask about how the charges will be coded at the doctor’s office and connect with your insurer to be sure these are covered expenses.
When a medical bill does arrive, take this step-by-step approach to tackle it:
1. Make sure you understand the bill.
First, is it a bill or an Explanation of Benefits? An Explanation of Benefits (EOB) is simply a statement from your insurance company explaining what medical services were covered (and how much they contributed.) Since you’ll be responsible for any remaining balance past that, you will usually receive an EOB first, and then the actual bill later. That bill should come directly from the provider or hospital system they work for.
Second, look at the line-item charges and be sure they’re accurate. If something looks off or says it was not covered by your insurance company, call them up and get the details.
2. Negotiate the debt.
The best time to try and negotiate your medical costs is before any care has been provided. If you don’t think you can afford the full cost of the services you need, ask early on about reduced costs or some sort of payment plan.
Providers may still negotiate with you after the bill is issued. Consider asking for a reduced fee in exchange for paying the bill off ASAP or setting up a repayment plan that spreads your costs across several months or years.
Other tactics that might work:
3. Consolidate the debt.
If your medical debt has started to become overwhelming or you’ve fallen behind on your bills, it’s time to consider consolidation. This combines all your debts into one single account, allowing you to pay just one bill per month, ideally across many months or years.
You can do this by putting the debts on a high-balance credit card or taking out a loan. Keep in mind that even if your credit score has dropped due to your unpaid debts, there are bad credit loans that can help.
4. Consider an income-driven hardship plan.
Income-driven payment plans are available to Medicaid participants with low income. They function like standard re-payment plans in that they spread your medical debt across smaller monthly payments over time. In some cases, providers may even reduce your debt if you’re on one of these plans. Because of this, you’ll want to consider an income-driven hardship plan immediately — as soon as your medical bills arrive.
There are many programs and providers that will provide medical assistance for free or for reduced costs to those with financial hardship. The United Way can help connect you with some of these services in your area, or you can look to the National Association of Free & Charitable Clinics or NeedyMeds.org, which details medical assistance programs by state. Many of these programs also offer bill advocacy to help reduce and negotiate existing medical debts.
Sight for Students
New Eyes for the Needy
Donated Dental Services (DDS)
Partnership for Prescription Assistance
The Assistance Fund
Good Days from CDF
Patient Access Network Foundation
Hearing Loss Association of America
Rehab Equipment Exchange
US Department of Health and Human Services / 1-800-311-BABY
Other forms of assistance you might want to consider include:
Medical bill advocates.
A medical bill advocate is a person who works independently of any insurance agency or healthcare provider. They work on your behalf to analyze your medical bills and negotiate them directly with providers and hospital systems. They usually come at a fee (a percentage of the amount they save you, in most cases). Popular options for medical bill advocates include the National Association of Healthcare Advocacy Consultants and the Alliance of Claims Assistance Professionals.
Help from family and friends.
You can also ask loved ones for assistance. If you’re not comfortable asking directly, consider setting up a campaign on a crowdfunding platform like GoFundMe or PlumFund.
If you still can’t pay your medical bills
Despite all these sources of help, you might still be unable to pay your medical bills — and you wouldn’t be alone. Medical bills are one of the most commonly collected on debts in America. According to the Kaiser Family Foundation, 52 percent of debt collection actions in our country contain some form of medical bill.
Unfortunately, if you’re unable to pay your medical expenses, this likely means you’ll have collections agencies at your door as well. This isn’t just annoying, but it can have a serious impact on your credit score, too. Having a single debt in collections can ding your credit by 100 points or more.
Dealing with Collections Agencies
If you’re dealing with debt collectors, make sure you know your rights.
You should also record every call you have with a collector and get other communications in writing if possible. If you ever feel your rights are violated, consider enlisting an attorney to represent you.
Filing for Bankruptcy
In the event you’re unable to negotiate or settle your medical bills, filing for bankruptcy may be your only financial option. And the sooner you file, the better. Bankruptcies stay on your record for seven years, and they can have a significant impact on your financial options during that time period. The quicker you’re able to file, the quicker you can get on the road to recovery, financially speaking. In medical debt cases, Chapter 7 bankruptcy is often the best route to take. This allows you to wipe medical bills and other unsecured debts clean, while still keeping the majority of your property and assets intact.
Recovering Your Credit
After you’ve filed for bankruptcy and eliminated your medical debt, you’ll need to work hard to get your credit back in good standing. That means paying your bills on time, every time, and avoiding big purchases or risky new debts. You also might consider:
Finally, just give it time. It takes a while to build credit, and even more when your credit has taken a major hit. Pay your bills on time, avoid expensive new debts and commit to long-term fiscal responsibility, and your credit will recover in no time.
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Isaiah 40:1-2 - Comfort, comfort my people, says your God. Speak tenderly to Jerusalem, and proclaim to her that her hard service has been completed, that her sin has been paid for, that she has received from the LORD's hand double for all her sins.
It’s another one of those days. You stayed up late working on a project knowing full well that if you did, you’d receive what was coming to you.
The pay you’d receive isn’t something you earn at work like overtime pay. It’s also not the pay you’d receive by way of complements and the words, “job well done.”
The “reward” I’m talking about can’t be taken to the bank to save up to spend on something you really want. The “reward” due to you would be how your body reacts to work those long hours. To be more specific, it would come in the form of a pain flare-up.
A pain flare-up can come in the form of muscle spasms, deep bone pain, loss of strength, inability to function on a daily basis and the guilt that would follow knowing that you had caused harm to your body.
But don’t stay put in guilt mode. Sometimes we have to do what we have to do. Life expects us to sometimes step up to the plate and give it our best shot. Our team is counting on us. All the bases are loaded and we’re up to bat. We can’t just put down the bat and run away. Right?
Not all is lost though. There are things you can do to quench the flames of a pain flare-up before the fire gets out of control when you must push yourself at work or home. Here are a few:
These are are just some of the ways that I use to help me make it through a difficult pain day. Painpathways.org, in their article, “Preventing and Recovering from … Overdoing It!” provides us with several ways to cope with a pain flare-up. One is to, “schedule a rest period mid-morning and mid-afternoon. A half-hour is usually effective, but some people take an hour or longer.” Another way is to, “do light stretching and petting your dog.” Animals can make a big impact on how you feel on the outside as well as the inside.
Though going through a pain flare-up can seem all consuming, with the right knowledge, help from coping skills and the support of others, you can get through the flare-up easier and faster than you may have thought you could.
In addition, take a look at the Bible verse above. Sometimes we may indeed feel guilty that we caused another pain flare-up, but God is ready to comfort you and speak kindly. He knows the price you’ve paid, and will wrap his arms around you, hold you and tell you that you’ll get through the pain together.
Matthew 25:21 – His master replied, “Well done, good and faithful servant! You have been faithful with a few things; I will put you in charge of many things. Come and share your master’s happiness!”
So you’ve been praying about an assignment, working your hardest to complete the task and provide the most accurate research.
You want to do well at your job so that you can be in line for a promotion. You work all day and into the evening thinking of nothing but your job. Finally, you’re done.
And to your great surprise, it mets your boss’ expectations. He even smiles at you. But what do you do?
No. You’re right back to square one thinking about the next assignment. That vision of your boss smiling at you spurns you on. Now, this may seem like a really good thing, and sometimes it is, but there can be serious consequences if you suffer from chronic pain. But, you don’t care about that right now. Well, maybe you don’t think of the consequences at all.
So you keep working all day and into the night the next day to try and get more praise from your boss. It’s a good sign of a hard worker to make sure you do everything to the best of your ability. However, if you’re not careful, your life will be only one assignment blended into the next one.
Your goal in this scenario is to please someone else. Is this to be your only goal? I’m not saying that we should be selfish and point the finger at ourselves and taunt our fellow coworkers about what “we” did.
I’m talking about a healthy acknowledgement that you did a good job, and it brought you pleasure to know you completed the task.
It’s okay to recognize your accomplishments and tell yourself that you did a good job. And it’s also okay to receive praise from others. It’s not always selfish. A healthy self-esteem can go a long way to carry you through difficult assignments at work and stressful situations in other areas of your life.
Inc.com posts the article, “3 Reasons Celebrating Your Many Accomplishments is Critical to Your Success,” describes how you can recognize what you’ve accomplished and benefits from doing so. An example is, “The act of celebrating changes your physiology by releasing endorphins inside your body and you feel incredible,” and, “Celebrating with colleagues and business partners tightens your network.”
Did you, also, know that God likes to acknowledge your accomplishments as well? Take a look at the Bible verse above. Here you read of God praising his servants by telling them that they did the job well done. So do it. Tell yourself that you did a good joy and remember it’s okay to receive praise from others as well.
Ezekiel 36:26 – I will give you a new heart and put a new spirit in you; I will remove from you your heart of stone and give you a heart of flesh.
It’s another one of those days. The sun may be shining outside, but inside your heart it’s a cloudy day.
You tire from the day-in day-out struggle with pain or an illness. Sometimes you do better than other times, but there are many days that you feel hatred toward your own body.
It’s like as if it’s an entity unto itself. It screams at you, “You think you’re in control of your life, but you’re not. I’m in control! I’ll decide what you can or can’t do today. I’m the one who can turn your day upside down.”
But you push yourself even though the screams inside haven’t calmed down. Anger is about to spill all over your day, while pain is right behind with fists pounding down the door to your heart.
You try to go about your day smiling at people in line at the grocery store or saying pleasant “hellos” to fellow coworkers. However, what’s inside will eventually find its way outside.
Your coworker gently places her hand on your shoulder and says, “I can tell you’re having the start of another bad pain day.” You feel anger swelling inside of you and then embarrassment.
Living with chronic pain and illness can steal much of your life. And it can indeed feel like it’s taking over your life, but it doesn’t have to. You’ll find some ways to look deeply at anger on lasvegasrecovery.com website in their article, “Anger, Resentment and How They Affect Chronic Pain.” The article provides some hands on ways to identify what you’re feeling and then tips on how to deal with the anger. It also discusses how resentment is related to anger in that anger is about the present, whereas resentment relates to the past.
Back to your coworker:
“I don’t think you know this, but I deal with chronic pain too,” they say. “It’s not an easy road to walk on, but I found that when you have even one person in your corner the anger that’s just beneath the surface dissolves into gratefulness for someone who understands.” Then your worker says they will pray extra hard for you today, and you find your anger just went out the door and a softened heart takes its place.
You see, God knows you. He sees that all of your anger has turned your heart of flesh into a heart of stone. But he is able to use people like your coworker to help heal your heart. Chronic pain may continue to spill all over your day, yet you may begin to feel less hatred of your body, and a renewed spirit which can see that there’s hope your day won’t have to be destroyed by the pain you face.
Karen Dalske is a freelance writer, public speaker, is active in her church and writes her blogs out of her own experiences of pain, illness and loss.