Regardless of what lands you or a loved one in the hospital, clinic, or doctor’s office – perhaps for an expected medical emergency or treatment for a chronic illness – you will leave with medical bills. Unfortunately, medical bills are often expensive and can leave large dents in your finances, sometimes even causing medical debt. And for people in the midst of recovery, the added financial strain can distract from the healing process.
To combat this stress, educate yourself on how medical debt impacts your finances, affects your health care, and changes your lifestyle. Learn your options for dealing with medical debt. Now that we are familiar with the truth about medical bankruptcy, it is time to look at the hard facts to gain insight into discovering ways to manage and eliminate medical debt.
Provided unpaid medical bills impact millions of Americans, it’s important to be aware of how such outstanding debt can impact your credit. Gerri Detweiler’s 2012 article also outlines four costly medical bill myths:
Myths of Unpaid Medical Bills
Myth 1: As long as I am making payments on a medical bill, it can’t be sent to collections.
While this can be the case, factors such as the size of your payments as well as payment tardiness can play a role. If your regular payment is merely a tiny percent of your overall debt or your payment arrives a day late, a provider can pass on a bill to collections.
Myth 2: I have to be notified before a medical bill is turned over to collections.
It’s not uncommon for a debtor to first learn that their unpaid medical bill has been turned over to collections by a call or letter from the collection agency itself. By this time, the damage may already be done.
Myth 3: Medical collection accounts are treated differently than other types of collection accounts when credit scores are calculated.
This is usually not differentiated. While intuitively it makes sense to apply some level of leniency for people enduring a medical crisis over debtors who were simply reckless spenders, distinguishing between medical and nonmedical collection accounts when calculating credit scores is not common practice.
Myth 4: To clean up my credit, I need to pay off medical collection accounts.
Collection accounts harm your credit scores and that’s generally true despite their payment status. While some models may favor collection accounts that have been paid, it’s no guarantee.
- According to The Burden of Medical Debt report that was released in January of 2016, about one in four adult Americans admitted to having difficulty paying medical bills in the past 12 months. Of the participants who stated that they had medical bill issues, 29 percent had to reduce their working hours due to a medical issue and thus experienced a loss of income, causing more financial hurdles.
- The The Burden of Medical Debt report states that 58 percent of people having difficulty paying medical bills have been contacted by a collection agency in the last year; and 11 percent claim to have declared bankruptcy, citing medical bills as a contributing factor.
- Another startling statistic from The Burden of Medical Debt report uncovers that 61 percent of people having difficulty paying medical bills indicated they struggled to pay for other bills.
- The Patient’s Perspective on Health Care survey from February 2016 reports that 42 percent of participants indicated that as a result of expensive medical bills, they drained most of their personal savings; and 27 percent admitted that they cannot afford basic necessities like food, heat, or housing.
- Often the financial strain of extensive medical care costs can lead to people cutting corners in their healthcare management. As a result of medical bill issues, The Burden of Medical Debt report shows that 65 percent of participants postponed going to the dentist; 62 percent used over the counter drugs in lieu of seeing a doctor when sick; 43 percent did not fill a needed prescription; 43 percent did not get medical treatment recommended by a doctor; and 34 percent regularly skipped doses of medical treatment.
- The weight of being bombarded with expensive medical bills can result in lifestyle shifts in order to shoulder the high costs. According to The Burden of Medical Debt report, medical bill problems have caused 72 percent of participants to cut back on major household purchases; 70 percent state they have reduced spending on basic household necessities; and 41 percent claimed that an individual from the household needed to take on more work to compensate.
The Good News
- The National Bureau of Economic Research released a study on medical debt in April 2016, showing that the expansion of Medicaid under the Patient Protection and Affordable Care Act (ACA) is helping consumers with medical debt, citing a significant decrease of unpaid bills, as well as the volume of debt being issued to collection agencies, specifically in zip codes of low-income areas. Although medical insurance is not a buffer for medical debt, it can still aid in reducing health care costs. These statistics prove that legislation is taking big steps towards providing people with affordable access to health care.
Crowdfunding for Medical Debt Relief
Considering these statistics, you may wonder how you can find assistance with expensive medical bills or medical debt. Crowdfunding has emerged as a powerful tool for fundraising by pooling donations from a large group of people. The crowdfunding model relies on the interconnectivity of the Internet by tapping into your social networks.
Medical crowdfunding has recently developed into a popular model to help people offset high medical bills or medical debt. As the leader in free online fundraising for medical expenses, YouCaring takes pride helping you and your family to raise the money you need. Start your free campaign today to remain in control of your finances.