Frequently people in need of medical services, who do not have health insurance, or who have insufficient health insurance coverage, are forced to use their credit cards to pay for health care. So if you have a lot of medical debt, you probably have a lot of credit card debt.
Medical Debt Is Unsecured Debt
Like credit card debt medical debt is considered unsecured debt. And also like credit card debt, it can be characterized by aggressive debt collection practices. Consumers should avoid paying for medical services with credit cards. When prioritizing bills to pay with limited funds, medical debt, like credit card debt, should come after monthly essentials.
The FDCPA Does Apply to Medical Debt
Sometimes hospitals have in-house collection departments and they would be considered original creditors who are not covered by the FDCPA. But debt collectors collecting on behalf of hospitals, doctors’ practices, laboratories and other medical services are covered by the FDCPA. With the proper debt validation letter, they can be instructed to cease all collection activities short of debt lawsuits. Junk debt buyers buy medical debts on the cheap. They too are covered by the FDCPA. Debt collectors and junk debt buyers could have trouble properly documenting medical debt without running afoul of some strict state privacy laws covering medical.
Watch Out for High Medical Charges to the Uninsured
Until ObamaCare, the Patient Protection and Affordable Care Act of 2010, uninsured patients were forced to pay the “retail” rates that hospitals and physicians charged. Insurance companies negotiated to discount these rates for their healthcare coverage groups, but the uninsured individual had no one to negotiate. Now hospitals cannot charge the uninsured eligible for financial assistance more than the insured. But, they still may try, so be aware of that.
Try to Negotiate
Since medical providers do sell their debts at deeply discounted rates, they may be susceptible to negotiating the fee for a lump sum settlement. It goes without saying that that type of negotiation needs to be backed up with written documentation. And, it should not be attempted with a debt collector.
You May Be Eligible for Assistance
Unlike credit card debt, you could be eligible for financial assistance from non-profit hospitals under new guidelines dictated by Obamacare rules. Medical finance assistance can be in the form of discounted rates and cheaper drugs, among other things.
Help For Those With Medical Debt
Medical problems frequently end up causing consumers to increase their credit card debt beyond what they can afford to pay.