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Dealing with Medical Debt Collections and Accident Liens

NBC6 Miami reveals some of the traps you can face with medical debt collections.

Despite ongoing changes and adjustments to our healthcare system, medical debt collections continue to plague millions of Americans. They’re one of the leading causes of collection actions in the United States and they can be even harder to deal with than other types of debt collection. In fact, medical debt is now the number one cause of bankruptcy in the U.S. But why are medical debt collections so difficult?


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NBC6 Miami focused on medical debt during a week-long investigation into debt collection. Consolidated Credit’s Financial Education Director April Lewis-Parks spoke with them to explain what can and can’t be done when a hospital wants to collect on a medical debt.

How to avoid medical debt collections

“You need to read and thoroughly understand your health insurance policies so you know what’s covered and what’s not,” April-Lewis Parks explains. “If you’re in doubt or have any questions, call to speak with an agent so they can clarify. Many basic insurance plans may not cover things like trips to the ER. ER visits can run up thousands of dollars in bills. So, if your insurance doesn’t cover them, you may need supplemental insurance.”

you may need supplemental insurance to secure full coverage that helps you avoid medical debt collections

Supplemental insurance is often necessary to secure full coverage, particularly if you get health insurance through your employer or Medicare. And even though it means you’ll pay more, it’s worth it to have the coverage when you need it.

“No one plans to go to the emergency room,” Lewis-Parks says. “So, skipping ER coverage because you’re healthy is not a good strategy. Better to absorb the cost of the extra insurance now than to face debt that can quickly drive you into bankruptcy.”

You should also be highly focused with any bills or invoices you receive during an ER visit. Make sure you keep any documentation you receive so you can call your insurance to make sure it’s paid. If you learn that your insurance won’t cover a bill you already incurred, talk to the hospital and work out a payment plan.

How to get out of medical debt collections

“If a bill slips through the cracks and goes into collections, don’t panic,” Lewis-Parks continues. “Call the hospital or medical service provider directly to ask them to work out a payment plan with you. You may also be able to negotiate with them to ‘re-age’ the debt. In other words, they can pull it back from collections in exchange for your commitment to stick to the payment plan your arranged. This will remove the collection account from your credit, so your credit score won’t suffer.”

You should also review the bill thoroughly to make sure you received all of the tests and services that they say they performed. If you find something you think is an over-charge, bring it up and ask them to remove it.

“If all else fails, it’s possible to include medical debt in a debt consolidation loan or a debt management program,” Lewis-Parks concludes. “If you have good credit and the medical debt collections haven’t hurt your score yet, look into debt consolidation loans. Otherwise, if you have bad credit, you can contact a consumer credit counseling agency. They can help you enroll in a debt management program, which can help pay off medical debt.”

If you have medical debt collections and other bills to pay, talk to a certified credit counselor to see if a debt management program can help you.

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