Your first thoughts are centered upon your health when you’re receiving medical care, — especially if it’s an emergency situation. Desperate to survive, the cost of the care is typically a secondary consideration — if it’s one at all. That is, until you receive that first bill outlining an amount you don’t have.
Many Americans have found themselves saddled with medical debt they’re unable to pay outright, regardless of their insurance policies — or lack thereof. Chances are it’s happened to you, a family member or a friend.
With that in mind, here are four things worth knowing about medical debt in America.
Nearly One-Third of American Employees Have It
The first thing to know is that you’re far from alone. In fact, about one-third of working Americans have medical debt in some form. Perhaps even more alarming is that about a quarter of those people owe $10,000 or more. CNBC further reports more than half (54 percent) of individuals with medical debt say they have defaulted on it.
Keep in mind, these statistics come from a survey of American workers — many of whom have employer-sponsored healthcare plans. It’s safe to imagine the figures for those with higher deductibles, or no insurance at all, may be much higher.
Medical Expenses Cause 530,000 Bankruptcy Filings Per Year
A study published in the American Journal of Public Health found 530,000 families file for bankruptcy each year due to medical bills or related issues. These findings were based on a sample of personal bankruptcy filings from 2013 to 2016.
This shakes out to about two-thirds of all bankruptcies in America being related to medical costs, whether it’s the bill itself or related expenses like lost income.
Bankruptcy winds up being the only path forward out of crushing medical debt for some. Others enroll in debt settlement with the goal of negotiating lesser payments on credit cards and medical bills, as demonstrated by these Freedom Debt Relief reviews.
Unpaid Medical Debts Can Eventually Affect Your Credit Score
Healthcare providers can sell medical debts to collections agencies after a certain period of time — typically 60, 90 or 180 days, depending upon the provider. But, as Experian reports, the three major credit bureaus now wait 180 days before adding this information to credit reports. Unfortunately though, at the conclusion of this six-month grace period, unpaid medical bills can stay on a credit report for up to seven years. This, in turn, can seriously impact your credit score for the worse.
Medical Bills & Insurance Statements May Contain Errors
Before taking that terrifying medical bill or insurance statement at face value, comb over the paperwork for errors — and ask questions along the way.
Here are some errors you may find:
- Duplicate charges
- Charges for services not rendered
- Charges you don’t recognize
- Expenses your insurance should cover
You may have to play phone tag with your healthcare provider and insurance company alike, but pointing out errors can help you get your bill adjusted to a fairer rate. Something as simple as a coding error can result in an upcharge you shouldn’t have to pay, so look over each itemized charge and flag any that raise concerns.
You may also be able to speak directly with your healthcare provider to work out a payment plan, especially if you’re experiencing another financial hardship like a layoff or death in the family. These four things to know about medical debt in America are quite sobering, but they can also help make it more manageable.