Dangers of Paying Medical Bills with Credit Cards |
By Charles Park on March 15, 2010
.jpg.aspx?width=75&height=75) The cost of medicine has risen in a staggering rate in recent years. It has outstripped both wages and inflation in a pace that has employers seeking to reduce the financial burden of medical insurance premiums, consequently placing it on their employees. The strain is felt by both the insured and uninsured as, according to a survey by the Commonwealth Fund, a quarter of the American people have reported having problems with medical expenses. Two thirds of this percentage were insured. To curb the sea of medical debt, more families are using credit cards as a last resort.
According to Mark Rukavina, coauthor of “Borrowing to Stay Healthy: How Credit Card Debt is related to Medical Expenses” and executive director of the non-profit group, The Access Project, “The Health-care net is made of plastic...People are using high-interest credit cards to pay for their health care”. According to the report which was published January 16, 2007, low and middle-class families who pay medical bills with credit cards end up with greater credit card debt than families who do not. This is most likely due to the high rate of interest credit cards impose in comparison to other modes of borrowing money. In July 2008, the Consumer Action conducted a credit card survey which found the median interest rate of an outstanding credit card balance to be 13.54%. The inability to pay back the total balance within a month can quickly lead to a slippery slope of mounting medical debt. This can also lead to difficulty in obtaining other lines of credit. If you do obtain one, chances are the rates will be high.
A couple of options are available before pursuing an alternative route of payment. Medical bill errors are common. Be sure to confirm all the medical services and their corresponding fees. If your insurer has denied any of your claims, be sure to resubmit them. According to Mr. Rukavina, “If that doesn't work, file a formal grievance or appeal with the insurer. Even it that fails, most states allow insured patients the right to an external review by a certified third party, often a state agency. And patients should exercise this right”. Hiring a billing specialist is another option. Discounts and/or extended payment plans are possible through successful negotiation.
Source:
Gardner, Amanda. “More Americans paying their bills with credit cards.” Health Day 16 Jan. 2008 <http://health.msn.com/health-topics/articlepage.aspx?cp-documentid=100153442>
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