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How Does Medical Debt Affect Me?

By: Michael Millington

Debt comes in all shapes and sizes. Some debts are large and ever-present while others are elusive and covered in shadow. Medical debt is one of those expenses you don’t think about until it starts to rear its head to look for payments. Out of everything that happens with a medical emergency, the least important thing on your mind is how or when you’re paying the bill. But before you fall into debt due to medical emergencies, here are a few things you should know about medical debt.


Check Your Insurance

The first thing you should check is whether your insurance takes care of your medical expenses in full. One occurrence that catches many off guard, is the notion that their insurance will handle any and all medical issues automatically. While some insurance plans do, many only take care of partial amounts. It’s better to know what your insurance handles ahead of time so you don’t get surprised later on with medical debt.

Contact your insurance provider and get a full rundown of what you’re obligated to pay if it’s anything at all. Also take note of whether you can avoid payments by altering your insurance plan. It might make more sense to pay a slightly larger monthly payment than an extra few hundred dollars towards a hospital stay.

Depending on your type of insurance there might be a list of medical procedures and expenses with uniform costs. That can prepare you for how that bill will impact your budget for the next few months you’ll be paying it off. Use this resource and you’ll be equipped with the knowledge to keep yourself from dealing with medical debt issues.


Act Fast

If medical debt accrues then it’s best to have it taken care of immediately, like any other debts. Unlike other debts, medical expenses don’t get reported to credit bureaus if they don’t get paid right away. Only when a debt is sent to a debt collector is it in danger of being reported as a negative mark against your credit. Be aware that regardless of the status of a debt, it can always be sent to collections at the creditor’s discretion.

As mentioned before, your priority might not be to make a payment on a hospital bill due to why it exists in the first place. Give yourself some time to destress and gather your bearings as you return to regular life. Make sure you reintroduce yourself to your monthly budget schedule and acknowledge the new debt you’ll incur from medical expenses. Immediately doing this can help alleviate the confusion of receiving a surprise bill in the mail.

The other thing to act quickly on will be the rest of your bills. Depending on the length of your hospital stay, you could have fallen behind on certain monthly obligations. Other debts could have built up in your time away so make sure you take the time to deal with these issues as well. The last thing you want to do is end up ruining your credit through no fault of your own.


Contact Your Creditors

In order to keep your credit safe from potential negative issues stemming from medical bills, make sure you keep in contact with your creditors to know the status of your debts. If your debts are sent to a debt collector, then you can also get in contact with your collectors as well. It’s a daunting task but as long as you’re willing to talk about how you can make payments (and stick to the plan) then they’ll want to talk to you. They can also help keep certain negative reports from going to the credit bureaus and ending up on your credit report.

There are some cases in which you’ll have to defend yourself against a wrongful billing. Make sure you keep a record of all bill transactions and any correspondence you may have received. There are instances where you are being charged for a medical reason but you’ve never received a bill for payment.

If you end up being put into the hands of a collection agency because of it then you have two options. You can either file a complaint with the Consumer Financial Protection Bureau or you can contact the source of the debt and request they take it back from the debt collector so you can settle it with them. Paying a debt in this way doesn’t impact your credit score and removes any negative impact from your credit report.


Stay Vigilant With Medical Debt

Medical debt can be a tricky thing to deal with when your main concern is to get better. Always try to stay on top of what you owe, know whether your insurance provider will cover your entire amount, and make sure you have proper documentation in regards to what you owe. Staying alert and aware of what you owe will keep medical debt from becoming a major issue.

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