By Siddarth Nagaraj on January 24, 2011
.jpg.aspx?width=75&height=75) When you or a loved one is suffering from an illness, ordinary obligations suddenly become much more difficult to bear. The adjustments that have to be made to both your schedule and your budget only exacerbate your stress. It’s clear that increased debt can only be a further strain, but medical bills, if left unpaid, can be devastating to your finances, your personal independence, and your ability to care for yourself and those around you.
Medical bills can be end up being left unpaid for a number of reasons-lack of fiscal discipline, difficulty meeting demands, and misunderstandings are just a few. Yet it’s absolutely vital that you keep up with payments in a prompt manner. Failure to do so can devastate your credit score and create nightmares for you and your family.
While all forms of debts will reflect badly on your credit report, unpaid medical bills have particularly negative consequences. If your credit history is already troubled, your situation will worsen even more if your report is being blemished for the first time. The damage done to your credit will remain on your report will last for seven years and will limit your access to financial resources, including loans and insurance.
Meanwhile, hospitals are becoming increasingly ruthless in their determination to collect unpaid bills for their services. Their motivations aren’t without reason; their ability to stay afloat depends on their success in receiving payments. In accordance with the Fair Credit Reporting Act, healthcare providers can inform the three major agencies which produce credit reports (Equifax, Experian, and TransUnion) of your outstanding debts. They cannot send details of your medical condition or treatment due to confidentiality issues.
Despite their ability to contact these consumer reporting agencies, an increasing number of hospitals choose to report your unpaid bills to collection agencies, which they then hire to extract payment from you. Not only will these agencies persistently hound you to pay your medical debts, they will resort to worse methods if they deem it necessary. There have been frequent instances of intimidating phone calls and lawsuits, not to mention targeting relatives whom agencies believe will be able to pay. Furthermore, the use of collection agencies will reflect badly on you rather than you provider when examined, as the latter will be able to argue that they were simply using a necessary means (however unpleasant) to obtain legal payment.
In response to widespread criticism of the growing use of collection agencies, the American Hospital Association has created a set of guidelines for the practice, including the creation of affordable financial counseling as an available option to patients struggling to pay their bills. However, as many hospitals have nonetheless chosen to ignore these recommendations, several states have begun enacting legislation establishing conditions under which debt collection agencies may target patients.
So how can you avoid becoming trapped in the quagmire of medical debt? As with so many other things, financial responsibility is paramount. By consistently paying attention to doctors’ bills, you may be able to spot any delays in payment which if not looked into could lead into long battles with collection agencies and fallen credit scores. If you are already struggling with unpaid bills, first assess your medical debt. Also make sure none of the details surrounding health insurance coverage is inaccurate. Depending upon where you live, you may be eligible for government-run aid programs which will help you resolve your debt. If you can afford to pay your bills over a gradual timespan, see if you can negotiate a payment plan with your healthcare provider. It’s in their interest to ensure you make your payments, so they may be willing to work with you.
Unpaid medical bills have become one of the most widespread forms of debt. Unfortunately, the related investment (healthcare) is not a voluntary personal expense which can be eliminated. In order to make sure that you get access to the medical services you deserve without adding more suffering through debt, make sure you take care of your finances as well as your health. |