People often feel embarrassed about their medical debt, seeing it as a personal failure if they cannot. But what happens if you are unable to pay your medical bills? What if you’ve racked up debt and can’t afford to pay it off when it’s due? In both instances, the ramifications might be disastrous.
According to the Kaiser Family Foundation (KFF), a health policy study organization, people may postpone needed care, such as medical visits, tests, treatments, and prescription drugs. They may find it difficult to pay other expenses, deplete their long-term resources, harm their credit, or even declare bankruptcy, all of which may take years to resolve [1].
According to a 2020 survey, about a third of working Americans are now carrying sums from previous healthcare bills, with 28% still owing more than $10,000 in medical debt. Health care debt is also one of the biggest causes of bankruptcy.
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What happens if you don’t pay medical bills?
You may not be able to pay your medical costs due to a lack of resources or current financial difficulty. However, if you get your monthly statement and discover that the total price is too high for your budget, there’s no need to fear. Even though you could be taken to court for unpaid medical bills, they will pursue other actions first. Here’s what to anticipate:
- First, you could be penalized for being late.
- Second, your medical provider might hire a collection agency.
- Third, your credit rating will be affected.
- They have the power to take you to court. [2]
When you delay payment, you increase the total due—if you miss the due date, you will incur late fees or interest. Your bill may end up being much more than it was when you started if you let late fees and interest charges build up.
You could be fortunate enough to escape penalty fees depending on where you live. Medical providers are prohibited from collecting these fees in certain areas, so check your state’s regulations. The following are some of the states that prohibit hospitals from collecting late fees:
- California
- New York
- Illinois
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Your medical provider might hire a collection agency.
If you don’t pay the bill after a certain amount of time has passed, your healthcare provider may hire a collection agency to handle your account. Debt collectors will call to collect this debt on behalf of the hospital or medical center. However, regulations prohibit them from calling before 8 a.m. or 9 p.m., and they can’t call you at work if you tell them they can’t contact you there.
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Your credit rating could be harmed.
You have 180 days after a debt goes into collection before a credit agency classifies it as past due. Your debt will show up on your credit report when this occurs, affecting your credit score. Medical debt may stay on your credit record for up to seven years. However, legislators are currently proposing changes to how medical debt shows up on your credit score. The Medical Debt Relief Act would change the days from reporting your debt to one year, giving more time to settle the debt before it negatively affects your credit.
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They can take you to court.
Don’t be startled if a debt collection firm threatens you with legal action—they are within their rights to do so. If your medical provider sues you for an unpaid payment, the court will determine the penalty. Wage garnishment is one of the most prevalent methods. This means that they will deduct a certain amount of money from your paycheck until the debt is paid off. However, most companies will work with you to resolve the account before taking this more drastic action.
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You cannot be imprisoned for failing to pay a medical bill.
You cannot be imprisoned for medical debt since it is a civil debt. However, you should be aware that disobeying a court order may result in prison time, so avoid doing so at all costs. Be sure to attend all court dates and provide the court with any required paperwork. [3]
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Getting out of debt with medical bills
You may be able to lower your medical bill debt in several ways. Each option will require time and effort, as well as some perseverance, but it has the potential to save you money and/or make paying off your debt more manageable.
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Examine your bills and inquire about them.
Many medical invoices include mistakes, such as double billing for the same treatment and arbitrary charges with confusing names that are difficult to interpret by patients. While you may get comparable invoices from other providers for previous treatments, taking the time to check all of your medical bill debt and asking questions about line-item prices you don’t recognize or understand might save you a lot of money.
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Consult the Bluebook Price Guide.
It may surprise you to learn that, like a car, every medical operation has a Bluebook value. These are the amounts that each doctor and hospital will charge for medical treatments, tests, or other services. For example, a hospital may charge one insurance company one price but bill another insurance company twice the amount for the identical surgery, resulting in sticker shock for patients who do not have insurance. When you get your statement, a little research can go a long way in possibly reducing the amount you owe.
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Negotiate the Payment of Your Medical Bills
If you can’t pay your medical bills, communicate with the doctor’s office or hospital. There may be programs to help you pay your debt based on income or other economic hardship. They may need tax returns and other financial documents, but discussing your medical bill debt might result in a part of the debt being wiped off and/or creating a more manageable, low, or no-interest payment plan. In addition, some hospitals are legally required to offer payment options for low-income families, so be sure to ask if you believe you qualify. There may be agencies that can assist you with this as well. Check with your local social service agencies to see what programs might be available to you.
Debt Consolidation
A personal loan for debt consolidation is another alternative for paying off your medical debt expenses. You receive only one monthly bill instead of receiving several letters, notifications, and medical bills from hospitals, physicians, and collection agencies. Make sure the interest rate on the internet loan isn’t more than what your original creditors could be charging. Shop around for a reasonable interest rate and a reputable lending company.
While not being able to pay your medical debt can be stressful, there are certainly ways you can reduce your bill or negotiate a payment plan that works within your budget. It may take some time and research, but it will be worth it for your pocketbook and peace of mind.
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Sources
- [1] “What Happens If You Don’t Pay a Hospital Bill? – The Atlantic.” https://www.theatlantic.com/health/archive/2019/08/medical-bill-debt-collection/596914/ (accessed Feb. 15, 2022).
- [2] “5 Things that Could Happen When You Don’t Pay Medical Bills – Debt.com.” https://www.debt.com/news/when-you-dont-pay-medical-bills/ (accessed Feb. 15, 2022).
- [3] “Medical Bill Debt: What Happens If You Don’t Pay Medical Bills?” https://www.prosper.com/blog/what-happens-if-you-dont-pay-medical-bills/ (accessed Feb. 15, 2022).