Medical debt continues to be a big problem for low-income and middle income consumers. Many hospitals don’t waste time in sending medical bills to collection agencies, from 150 to 210 days or to as little as 30 to 60 days.What can you do about medical debt?
- Get Insurance – The best way to deal with medical debt is to apply for assistance programs like Medicaid, Medicare, or private insurance programs.
- Negotiate – You may want to try informal negotiations over medical debt.A settled and paid a medical debt cannot negatively impact your FICO credit score.Often, hospitals engage in discriminatory billing practices charging uninsured patients more than the hospital’s actual cost of service (in order to make-up for the short fall in Medicaid coverage with other patients). This is called chargemaster pricing, and it’s wrong, and you should mention it when you try to settle with the hospital.
- Go to Court – Because medical debts are unsecured, collectors’ only legal recourse is to a get a court judgment followed by a bank garnishment or seizure of non-exempt property. You cannot lose your house because of a judgment on a medical debt. You have several litigation strategies to defend yourself against medical debts when it goes to court.
- Debt Harassment Lawsuit – You should explore if the medical debt collector engaged in illegal debt collection practices by violating the FDCPA
- Fair Credit Reporting – Look at your credit report. Dispute erroneous medical debt reporting information under the FCRA. Maybe you thought the medical bill was covered, but your insurance company never paid it. That could open up a bad-faith claim against the insurer. Were you a victim of identity theft? Maybe someone used your soc. sec. no. to get medical care under your name, and now you are told to pay for it. Obviously, you shouldn’t.
- Debt Collection Lawsuit Defenses and Strategies – Similar to credit card collections, you can force the collector/creditor to prove its burden that it owns the debt and you owe the debt. Look to see if they have good evidence to make their case. Even if the collector can prove their case that you owe a medical debt, you can always show that the medical service rendered was not a reasonable value and the medical debt being collected on was inflated several times the actual cost of care, or that there is an error in the medical billing – i.e. double billing, wrong code label.