By Laura J. Lowenstein, Esq.
Pop Quiz: What remains the top reason cited for personal bankruptcy in the United States?
- Credit Card Debt
- Mortgage Insolvency
- Medical Debt
- Student Loan Debt
- Outstanding Tax Liens/Judgments
If you answered c. Medical Debt, then you just identified the primary culprit for personal bankruptcy filings amongst Americans. While I have written about this before, it bears repeating that health insurance does not insulate you from the crippling effects of medical debt. In fact, 20% of Americans under the age of 65 years old (i.e., Americans without Medicare coverage) report they have trouble staying current on their healthcare expenses.
What I find interesting about the medical debt phenomena is that society remains not only ill-equipped to manage unforeseen medical expenses but also ill-informed despite the seemingly unending coverage regarding the ACA and what a repeal and replacement will mean for people. As an attorney that deals with healthcare law and all sides of medical debt, I find the news coverage on this topic alarmingly partisan instead of information and fact-driven.
In my experience, consumers are shockingly naïve about what their subscriber contracts mean and, more importantly, what kind of coverage they provide. They are often told it is “great coverage” by an employer, labor fund, consultant or salesperson and take that to mean… “I am covered.” Not so fast. Try explaining to a consumer with a legitimately owed medical debt that they had a high deductible plan or a 70/30 co-insurance responsibility or a limited indemnity plan with minimal emergency room coverage. What often transpires are looks of confusion and a resounding “I had no idea I was responsible for those amounts.” Yet, had they studied their coverage parameters and 100+ page subscriber contract, they would have known that. I say that with more than a hint of sarcasm because to most people healthcare jargon might as well be written in a foreign language and a 100+ page contract is often going no further than the bottom of their desk drawer. That is the sad reality and the ACA has exacerbated the problem with poor plan coverage, minimal plan choices, high deductibles, increasing premiums, narrow networks and overall confusion in the system.
So what basic steps can you take individually while we wait for Congress to pass another legislative scheme that (hopefully) fixes some of the ACA problems? Here are some suggestions:
- Understand your coverage. Ask questions!!! Know what your plan pays and what your plan shifts to patient cost-sharing in hard numbers. Make sure you understand your maximum out-of-pocket liability in both in-network and out-network scenarios and track it.
- Outside of emergency circumstances, speak to your healthcare facility and provider(s) about their network participation and financial assistance programs and expectations for payment before you get treatment.
- Have an emergency savings fund for unexpected medical expenses. I know “emergency savings” is a term of art used in many contexts but there does not seem to be one more fitting for the terminology than a medical emergency.
- Research whether your State provides consumer protections for emergency and surprise bills. Often these types of regulations are missed by the health plans and providers themselves in the processing of claims since every plan is different and, thus, may not be subject to your State’s law. It is, thus, incumbent on you as the patient to know what protections you have in your geographic area.
And, finally, if you find yourself the recipient of a collection letter regarding an outstanding medical bill, be sure to call the collection agency to discuss the account and confirm the amount owed. Patients are not the only ones confused by the system – sometimes billing companies, hospitals and/or health plans themselves get the coverage and/or processing wrong. It always benefits you to arm yourself with the documentation and knowledge available to ensure the correct amount has been billed to you. If you confirm that is the case, discuss settlement and payment plan options before any further adverse action need be taken against you. Unlike other types of debt, medical debt creditors tend to be more willing to work out settlement and plans for payment knowing the expenses may have been unanticipated.
Bottom line: The healthcare system is difficult for all parties involved. Providers and patients alike are being squeezed from all sides by a regulatory system that lately seems to only benefit the large health plans. With some patience, preparation and willingness to work out your debt, a resolution is often practicable and workable.
For more information on Capital Resource Management, Inc. and how we help individuals and businesses generate revenue through better financial practices and compliant collections, including for medical debt accounts, please contact us at 1-844-277-3277.