All kinds of debt have the potential to lead anyone into a devastating financial position. This is why it is very important for you to be careful with debt. It is okay if you do not completely eliminate it from your life. However, you need to learn how to manage any credit that you accumulate over your lifetime.
Among all the type of credit that Americans owe, medical debt seems to be the one that we fear the most. It is not just because of the amount – but also what the debt represents. It means someone has an ailment that may or may not be solved. Sometimes, the ailment goes on for a long time and the medical bills just keep on piling. This is probably why we all associate it with bankruptcy. In fact, when Obamacare was being introduced, the government was using medical bankruptcy as a valid reason why it should push through.
But is there any truth to this? Is the American medical debt that bad that it is causing a lot of people to declare themselves bankrupt?
According to reports, there is no truth to this. While a lot of bankruptcies include some credit owed to health care facilities and professionals, only 4% of bankruptcies are primarily caused by unpaid medical bills. That means all the others have various factors leading to bankruptcy. Sometimes, people already have a lot of debts, to begin with, and an unexpected medical bill pushed them towards declaring themselves bankrupt.
If what they said about the medical debt of Americans is not true, then what is the truth?
Medical debt problem of Americans
Although it may not be the cause of a lot of bankruptcies, it is still something that makes people’s lives more difficult. According to a study, almost 3 out of 5 collection calls are for medical services. Not only that, having health insurance does not exempt you from this type of debt. If the situation demands it, you may still end up borrowing money if the illness proves to be too expensive.
There is no doubt that medical debt has the potential to become a huge debt problem. Earlier it was mentioned that it is not just the amount that is the problem. It is harder to overcome because of the situation surrounding it.
Here are several truths that you need to understand about medical debt.
This debt is one that cannot be ignored when needed
Health is something that you cannot ignore – especially if it involves your health or that of a loved one. So if you need to spend because you or someone you love requires medical attention or treatment, you will move heaven and earth to make sure you get it. That means you will not shy away from borrowing money if that is what it takes to help to get better.
This debt comes at a stressful time
It is emotionally draining to deal with any type of ailment. Not only that it will put you in a very stressful situation. This is why borrowing money at this time can be very dangerous. Although you will try very hard to make a smart decision, your mental state may not be at its best at the moment. And when you borrow money under stressful circumstances, there is a higher chance that you will make a mistake. You might become too impatient to know all your options and compare rates. You might end up going for a loan that has a high interest rate – which will cost you more.
This debt can ruin your financial future
Healthcare in the country is not cheap. This is why Americans are encouraged to get health insurance. However, as mentioned, you can have a health insurance and still end up borrowing money to completely pay for the treatments and professional services that you will require. If you really want to lower the chances of having medical debt, you need to have enough emergency funds saved up. There may be times that even this is not enough – but that does not matter. There is only so much you can do to prepare but that does not mean you should not do everything you can. The consequence of being unprepared is a ruined financial future – and nobody wants that to happen.
Tips to deal with medical debt
According to statistics, more than 43 million people are having a hard time paying off their medical bills during the first half of 2017. What is scary is the fact that a lot of these people have health insurance. Despite the fact that they have prepared for these medical emergencies, they are still left with a lot of bills to pay. So what can you do to keep this type of financial situation from ruining your future?
If luck is not on your side and you end up with a lot of medical debt, do not feel like it is the end of the world. There are ways for you to overcome this problem so you can strengthen and secure your financial future. Here are some of the tips that you can use to overcome your multiple medical bills.
Do not ignore them
Pretending they are not there will not make the bills go away. In fact, the longer you go without paying off your medical bills, the bigger the problem will be. This is why you need to make sure that you face the problem – no matter how stressful or intimidating it is. Even if you know that you cannot afford to pay back the debt, you need to talk to the medical providers and the facility that you owe money to. Try to work out something with them.
Scrutinize the bill
Do not just look at the bill to see the amount you have to pay. Make sure you scrutinize that amount and that you understand what that amount entails. Check every detail to see if it only includes treatments and services that you received. Sometimes, people make mistakes with the bill. You need to ensure you are not paying for something you did not get. When you receive the mail from the health insurance company, make sure it does not just contain an explanation of benefits. You have to ensure that it shows that amount that you have to pay. Sometimes, your insurance claim does not cover the whole amount. You need to know what you are responsible for paying.
Negotiate your bill
If you really think that your medical debt will lead to a huge debt problem for you, do not hesitate to negotiate it with the medical service providers. It is also important to be aware of how much you should be charged. If you are being charged a very high amount for bandages, you might want to get to know how much that really costs so you can negotiate it. Usually, it is just the billing clerk that you have to deal with. If your bill is too high, you need to find a way to make it smaller. If that is not possible, work out a payment plan with them. The fact that you are making an effort to pay the debt even if you cannot afford it should encourage them to cooperate with you – or at least hear you out.