Climbing Out from Under Medical Debt

It's no secret that the cost of medical care has spun out of control. A studypublished in The American Journal of Medicine last year found that in 2007, 62% of all bankruptcies in this country were related to medical expenses. What's more, three quarters of people with medical debt had health insurance.

That survey was conducted before the economic meltdown that began in 2008. We must assume, therefore, that those numbers are even higher today.

If you're among the millions of Americans struggling with medical debt, here are some steps you can take to help yourself.

• Say "No" to medical credit cards. Medical debt is interest-free and doesn't usually show up on a credit report unless it goes to collection. Once you pay for your medical expenses on a credit card, you close out your account with your medical provider and turn it into consumer debt, which does appear on your credit report and is subject to high interest rates. You also shut down any chance of negotiating with the hospital or doctor.


• Review your bills. As I covered in last week's post, a huge number of medical bills contain inaccuracies. Make sure you look for duplicate or inappropriate charges before you pay any bills.


• Did your insurer pay? Confirm that your health care provider has properly billed your insurer and that your insurer has, in turn, paid what it owes.


• Appeal care denials. If your care was denied, check into your insurance company's appeals process. Under the new health reform law, health plans created after March 23, 2010 must allow you to appeal denials. If the internal appeal is denied, your plan is required by law to explain why and provide you with information about how to obtain an independent review of your case.


• Negotiate. Always ask for a better price on your medical care.


• Ask for a payment plan. Ask to pay off your debt over time and request that the hospital or doctor not report your bill to a debt collector while you do. Do your best to negotiate a plan that's interest-free, and don't agree to a plan that requires you to pay the bill in full if you miss a payment.

What if You Can't Pay?

If you're unable to pay your medical bills, here are a few options to consider:

• Explore Medicaid. Many states will take high medical bills into account when evaluating eligibility for Medicaid coverage. Even if you weren't previously eligible, medical debt may change your status.


• Ask for financial assistance. Many hospitals and clinics offer free or low-cost care to help people otherwise unable to pay. Talk with your provider's billing office and ask if it will either forgive some of your debt or offer treatment at a lower-cost. To find a hospital or health center in your area that provides free or low-cost care, go to the U.S. Department of Health and Human Services resource web site .

For help dealing with medical debt, search for consumer assistance programs by state at the nonprofit Families USA. For free legal assistance, check lawhelp.org. You can also work with a certified credit counselor.

Got a health insurance question? Post it below. I'll respond in this blog each Thursday to as many of your questions as I can.

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