You never want to find yourself in the position of putting off medical care because you cannot afford it. Unfortunately, many people living in the United States deal with this problem every year. They’re too afraid to seek help because they don’t have insurance and don’t know how to pay. While emergency rooms must help patients, those hospitals will bill the patients later. Those who do not pay face medical debt, which will affect their credit scores. Find out the top things you need to know about medical debt to see what you can do about it.
No Upfront Payment Required
The Consumer Financial Protection Board (CFPB) found that Americans owe $88 billion in unpaid medical debt. One thing you should know is that hospitals do not require an upfront payment. Even if you have no money in the bank or a negative account balance, feel free to visit the ER. They will send a bill to you later that shows how much you owe. Many hospitals can also direct you to other resources for additional help such as clinics that offer sliding scale fees. Depending on how much you make, you may get free health care.
Payment Plans are Available
Debt can be an overwhelming part of personal finance. If you recently went to the ER and just got a bill, always call the billing department before you do anything else. The billing department can set you up with a payment plan. Most plans depend on how much you make. If you are unemployed or make less, the hospital may even forgive the total amount you owe. One reason to sign up for a payment plan is that it keeps your bill from going to collections. Even if it appears on your credit report, it acts as good credit because you made payments on it.
Medical Debt Collections
Medical debt collection is a profitable industry in the United States. It works in the same way other forms of debt do. You usually receive a bill that you can pay with a credit card or debit card. In most cases, you will get several bills in the next few months. If you do not make a payment, the facility will send the bill to a collections company. That company will then contact you and ask you to pay the total amount. A collections company can sell your medical debt to others who will keep coming after you for years.
Statute of Limitations
There is a statute of limitations on medical debt, but it varies between states. Most states keep the debt tied to you for seven years. That means that the medical bill will follow you around for a full seven years before it goes away. Some states increase this period to a full decade. Medical debt doesn’t always disappear when it should though. You’ll often hear from people who faced collections agents 10-15 years after they sought help because a new company bought their debt from another company.
Medical Debt and Credit
When you want to make a big purchase, you need credit. Whether you want a mortgage to buy a home or you just want to open a new credit card, the lender will pull your credit. As medical debt stays on your report for seven years or longer, it can reduce your chances of getting a loan. Lenders will view you as a risk and then you can’t pay off your debts. You should consider medical debt relief to get out from under that debt. This helps you consolidate your debt and reduce the impact it has on your credit report.
Debt is Common
Debt is common, especially in the United States. Your credit report includes both good and bad debt. While good debt includes a credit card you pay off every month and a loan you paid in full, bad credit includes any loans you defaulted on and any past due amounts you owe such as medical debt. Medical debt can keep you from getting a mortgage or buying a new car and may even limit your job opportunities. Learning more about medical debt and what you can do about it will help you pay your bills and get relief from debt collectors.