Rising medical debt is generally because countries lack access to free health or the public healthcare system is subpar and therefore have to opt for private medical care. That being said, not everyone can afford emergency treatments and hence end up struggling with debt that piles up.
If you feel like you’re struggling or going through a difficult time, keep reading to learn about your medical relief options.
How Does Medical Debt Pile Up
Health Care is Expensive
In the United States especially, high healthcare costs and medical treatments are the main reason medical debt piles up. Even if people have health insurance, they are often forced to pay out of their pocket for incomes they don’t make. As a result, debt piles up into a mountain resulting in poor credit scores and depleting mental health.
Little to No Health Insurance
Medical debt may also pile up if you are uninsured or underinsured. It means you don’t have access to health insurance, or your existing insurance doesn’t cover your medical expenses. Due to this, you are vulnerable to covering up all or remaining expenses on your own.
Chronic Illness
With chronic illnesses, you don’t get by with just a few checkups, and they require ongoing treatments and regular prescription doses. Many individuals suffering from such illnesses can’t keep up with these regular expenses and suffer crippling debt.
5 Things to Know About Medical Debt Relief
Negotiations
If you believe your health insurance will not cover your medical treatments, emergency surgery, or even something as simple as your medicine prescriptions, talk to your health service provider for relief before looking elsewhere. Many hospitals are willing to negotiate payment plans or discounts depending on a need basis until a solution is found which is best for both parties.
For this to work, however, you must be prepared with all your documentation to make a good impression. Also, timing is key; don’t wait for the last moment to negotiate. If you’re going through treatments, ask a family member to discuss your situation for you from the start.
Debt Forgiveness Programs
Some hospitals offer debt forgiveness programs, but they vary on eligibility. That may depend on your income, whether you own property, or even the income of family members. Research the hospital before going on for treatments to check out their strictness with the debt forgiveness programs.
Consolidation Loans
Credit cards and available loans offer to ask for higher interest payments than medical consolidation loans. Consider these medical debt relief options before going to a bank, as they can be much easier on the pocket.
Credit Counseling
A credit counselor helps you prioritize debt payments depending on which may affect your credit and wallet the most. They can even help you negotiate with your healthcare provider to help you devise a simpler payment plan on your behalf.
Bankruptcy
Bankruptcy should always be the last resort option if there is no possible way to repay your debts. There are two types of bankruptcy that you may file for in the case of your medical debt. Chapter 7 allows for a complete discharge of your debt, while Chapter 13 allows you to build a payment plan wherever possible. It greatly affects your credit score, so ensure you have researched all other options.
Challenges You May Come Across
Depleted Credit Score
Any time of debt repayment is crucial for your credit score. A high credit score makes you more appealing to banks, and hence are likely to get loans at better interest rates because they believe you to be less risky.
Rising medical debt can greatly impact your credit score. As a result, you’re unlikely to receive loans from banks even to pay off those debts because you may seem too risky of a client. However, it would be best not to stress yourself out too much because there are other ways to escape this troubling situation, as mentioned above.
Scams
Many people and organizations target those going through a difficult time. They take advantage of their vulnerability by offering them relief options that sound too good to be true and, quite often than not, are. Please make sure you are researching the legitimacy of any company you decide to work with before providing them with your personal information.
Tax Implications
Sometimes, forgiven medical debt may be considered taxable income, leading to potential tax implications. It’s important to consult with a tax professional before pursuing medical debt forgiveness.
Conclusion
Medical debt can be overwhelming, and sometimes the system isn’t always supportive. But please research your options well, as stated above, and know that there may be relief in the future. Seeking support is important, and you are not alone!
Author: Elizabeth Howard
Lizzie Howard is a Colorado native who after graduating from the University of Colorado spends her time as a freelance writer. When Lizzie isn’t writing, she enjoys going on hikes, baking for her friends and family, and spending time with her beloved yellow lab, Sparky.
