It is no secret. More than any other factor, medical debt remains the top reason people file for bankruptcy. And for some, medical debt has grown into a much greater concern during the COVID-19 pandemic.
In a 2019 study released in the pre-pandemic era, researchers found that roughly two-thirds of the people who filed bankruptcy cited medical ailments as the major reason for their financial demise. In addition, an estimated 530,000 U.S. families annually file bankruptcy due to medical conditions and their associated costs. It remains to be seen whether those numbers will significantly change as a result of the pandemic.
Take initiative to work out things
Published in the American Journal of Public Health, the study is based on information from 910 U.S residents who filed bankruptcy between 2013 and 2016. The findings also disclosed that having health insurance, in many cases, did not provide protection from debt.
When faced with medical debt, here are some steps that may help you:
- Carefully review all medical bills: Question the bills you receive as they may contain errors such as billing for a procedure that did not occur or double billings. In addition, if you wonder why a procedure was not covered, contact your health insurance company.
- Negotiate: It is not unheard of for patients to bargain with medical care providers and hospital billing departments. In certain circumstances, these players may accept a portion of the bill as payment. Make sure you grasp the costs related to the medical procedures in question. This latter detail provides you with an advantage.
- Consider state and federal assistance: Investigate whether your family may qualify. A recent report from the Consumer Financial Protection Bureau disclosed that low-income earners have higher rates of medical debt compared with the overall population.
- Pursue a payment plan: Some medical centers have agreed to low-interest and interest-free payment plans. Generally, hospitals and clinics prefer not to forward patient-related bills to credit collectors.
Drowning in medical debt requires you to take crucial steps to overcome such a situation. Take the initiative, and things just may work out.
The bankruptcy option
Granted, medical debt may seem overwhelming, and the worries may keep you up at night. Personal bankruptcy represents a viable option and important step to help you gain a fresh financial start.