Financial experts often talk about how to plan your budget and track expenses properly. However, some expenses do not depend on us and are difficult to foresee.
One such expense is medical bills. Given the prices in the US medical healthcare system, not everyone can pay such a hospital bill right away if he does not have health insurance. And not from one or two paychecks, either. But leaving you bills unpaid may lead to unpleasant consequences.
Long-term medical bills can grow and create more and more problems, raising a legitimate question: what happens if you don’t pay medical bills?
What is Medical Debt?
To answer the question of what will happen if you do not pay the medical debt, it is worth understanding what it is.
Medical debt, legally speaking, is no different than any other, except for the money you can borrow from friends and family. Like any debt, you must pay it on time. If, for some reason, you do not make the agreed payment on time, you will face the consequences — calls and messages from debt collectors and additional charges.
Therefore, if you know in advance that you will be undergoing a particular medical procedure, the cost of which you will not be able to repay immediately and you have not signed a contract with an insurance company, we recommend that you adjust the budget and set aside some money to cover your future medical expenses. If it’s not possible in your financial situation, there are also good options for medical financing. For example, there are various loans that can help with medical debt. Even if your credit history isn’t perfect and you’re worried about your credit score, bad credit medical loans are available to just about anyone. Such loans allow you to cover a medical bill without going through a hard credit check. In this way, you can both owe money without a large down payment and leave your credit score unchanged. Although you will be obliged to pay interest on a loan, it’s still better than leave your medical bills not paid and let them go out of control.
Medical Bill Debt: America’s Common Problem
In a string of phone calls from debt collectors about unpaid medical debt, it may seem like you’re the only person with this problem. However, it is not. Unpaid medical bills are a common problem in the US. Due to problems with insurance or lack of it, people are constantly faced with the problem of paying medical bills. The prices for medical services are often exorbitant, and given the unexpectedness of these expenses, this becomes a serious problem.
Right now, over 137 million Americans have the same problem as you. Therefore, do not be shy about this. You can safely ask for help with medical debt.
Consequences of Unpaid Medical Debts
While we strongly discourage avoiding paying medical debt, we also have a duty to warn you of the consequences. Of course, everything may depend on the medical institution that provided you with services and the amount of your debt. However, often the results are about the same.
Interest and Late Fees on Unpaid Medical Debt
If you don’t start paying your bill on time, your healthcare provider will inevitably start adding late fees and interest fees to your balance. Thus, they will encourage you to pay off your medical debt as soon as possible, so it does not grow.
In order to know in advance exactly what late fees may be, we recommend that you carefully read all the documentation that will be given to you at the clinic before signing it. If you leave your signature, it will mean that you agree with everything written in the document. However, the interest rate and late fees can be challenged in court if it comes to that.
Debt Collection Agency
Often, if you don’t start paying your debt for 90 days or more, the medical provider will turn over your details to a medical debt collections agency. You have probably heard the details about the work of a debt collector yourself.
Aggressive collection tactics can be exhausting — constant phone calls from collections agencies, messages, contacts with your friends, and constant psychological pressure.
Serious Damage to your Credit Scores
The collection agency will report your medical debt to three major credit bureaus. They are Experian, TransUnion, and Equifax. The waiting period is 180 days. And if after that the medical bills are not paid, the medical bill debt will appear on your credit report.
Just one unpaid debt can do more damage than you think. Your credit scores will drop significantly, which will lead to many problems in the future. Whether you’re about to take out a car loan or a new credit card, your interest rate will be higher than before. There may also be problems with obtaining various loans if a credit check is carried out with the help of credit bureaus.
Lawsuit as a Result of an Unpaid Medical Bill Debt
If you refuse to pay the collection agency, they will sue you. This will legally allow for yet another aggressive tactic, such as liens, wage garnishment, and bank account levies. Even so, you may find out how to reduce medical bill debt. The main thing is not to give up and look for possible solutions to the problem.
How to Reduce Medical Bill Debt
Trouble paying your medical bill can make you feel depressed, and at some point, you feel like running away or hiding is the best idea. However, it would help if you were proactive instead. Silence will only increase the debt, while it is better to seek help and think about how to reduce medical bills to the amount that you can pay off in a while.
Review your Medical Bills and Check for Errors
It may seem to you that medical bills are a priori correct, but this is not so. As in any other business, mistakes can be made in the doctor’s office or the hospital, and you may get incorrect bills. Some treatments may be listed twice, or the wrong number may be listed. Or the bill includes a procedure that you did not have at all. If you check your hospital bill carefully before you sign, you can significantly reduce your medical debt.
Negotiate your Medical Bills
You should not delay paying your unpaid medical bills until the moment your account falls into the hands of collectors. Negotiate bills with the hospital billing department or seek for medical financing from healthcare related loan providers. This is a real opportunity to reduce medical bills’ total amount.
You may report that you have low income or temporary financial difficulties, including problems related to medical bill debt.
For low-income patients, many hospitals offer lower prices or even offer treatments for free.
Try Crowdfunding to Pay your Medical Bill Debt
Even if you are unable to reduce the amount of your medical bill, you can try to find money to pay for it. Create a page describing what happened on GoFundMe and share it with friends and family. Many people are ready to help with small donations, which in the end, are collected in a tidy sum and will be able to pay off your medical debt.
Look to a Charity Organization which can Cover your Medical Bills
Another way to find the money. If your condition is rare or chronic and you constantly need help, and your health insurance company does not cover these costs, look for a charitable organization or foundation. For diseases such as epilepsy or cancer, there are entire networks of charities that can take part of the cost of your healthcare bills.
Another option that will help you get rid of medical debt is to declare yourself bankrupt. This is not the easiest financial process, and it is not always right for you. Also, keep in mind that this information will remain on your credit report for ten years or more.
Consult a bankruptcy attorney about your financial situation in order to get the most accurate and relevant question for you, taking into account your credit score and other circumstances.
Conclusion: You Can Get Help with Your Medical Bills
Lack of health insurance and unforeseen illnesses or other emergencies can hurt your wallet and drive you into debt. We have covered what may happens if you don’t pay medical bills on time. Anyway, you should not hide your head in the sand and try to run away from calls from the hospital. Instead, we recommend that you take this with a cool head and turn to a patient advocate.
Try contacting financial assistance programs at the hospital; this may help you even at the first stage. And if it’s a non-life-threatening surgery and you made an appointment at the doctor’s office in advance, be sure to ask about the procedure’s insurance coverage if you’re insured.
These and many other tips will help you reduce or eliminate medical debt before it causes you major problems.
And most importantly – take care of yourself and your loved ones so that there are as few hospital bills in your life as possible.