When the coronavirus pandemic settled into the U.S. economy, a tailspin developed as local and state governments struggled to contain the virus through quarantine orders and business closings. This event cost 30 million Americans their jobs and as a result, 12 million of those workers no longer have employer-based health insurance.
The U.S. workforce now faces a double jeopardy scenario; they must risk major illness while trying to meet day-to-day living expenses such as housing and food. The average cost of treatment for the COVID-19 virus is $30,000, which has forced some into medical debt without much of a choice, or options.
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Are There Current Protections for Consumers with Medical Debt?
The cost of medical care in America ranks as one of the highest in the world, yet quality of care and access continues to rank below comparable wealthy countries. This burden has not gone unnoticed by state and federal governments, which recognizes citizens are suffering major penalties on their credit reports because of unaffordable healthcare costs.
The Consumer Financial Protection Bureau, (CFPB) state lawmakers and debt counseling agencies have tried to correct the distorted view of an individual’s creditworthiness because of excessive medical debt in a system struggling with affordability and access.
180-Day Grace Period
The Consumer Financial Protection Bureau introduced a 180-day grace period in 2017 that allows time for a medical bill to be fully processed and appropriate billing to be completed before claiming a debt is overdue. Additionally, this allows patients time to dispute charges or seek financial assistance for the medical expense before it hits their credit report. During the current pandemic this grace period can offer much needed assistance for those burdened with unexpected or excessive medical debt.
State Legislation Regarding Surprise Billing
At the beginning of 2020, four more states joined numerous others in passing legislation that reigned in surprise billing practices. These charges often catch insurers unexpectedly due to unknowingly receiving services at an out-of-network provider. These new state efforts to curb these bills add important protections for consumers, including the prohibition of balance billing and extends protections to emergency departments.
While there are many more proposed legislative solutions to mitigate overly punitive damages caused by medical debt, there still isn’t a broad enough consensus for any to earn congressional approval.
What Can Consumers Do About Their Medical Debt?
Individuals needing medical care are often caught in an unfortunate scenario during this national crisis: healthcare, home or food? For many, postponing their health needs seems the only viable choice from a financial point-of-view, but the long-term repercussions often end up costing much more in treatment costs.
There are several options available to achieve the level of healthcare needed as well as allowing for financial means to do so without going into staggering debt. Consider some of the steps below to successfully manage medical debt and avoid collections:
- Don’t simply accept no for an answer when negotiating the cost of a medical bill. Many medical service providers have patient care advocates that can help settle billing disputes, offer payment plans and resources for assistance.
- Avoid paying off medical debts with credit cards. The hospital charges little to no interest compared to putting it on interest loans.
- Seek payment assistance for medical care expenses early, well before debt collection begins.
- Always negotiate the price of care when insurance doesn’t cover an expense. Many hospitals and medical care providers have discount options for a variety of circumstances.
- Review billing with an eagle eye. Vague charges and miscoded services can lead to insurance claim denials that are easy to fix with a simple phone call to a provider’s billing department.
- Know your rights as a consumer. Consumer rights exist to protect against abusive collection practices. Creditor rights do not include the right to abuse those who owe a debt. The National Consumer Law Center and the CFPB have instructions on how to send a do-not-contact letter on their websites. Credit counseling services can also provide information about the statute of limitations for these types of matters.
- There are nonprofits to help consumers with medical debt, including charities that work with hospitals and local health providers to reduce the overall cost of care.
- Look into state programs such as Medicaid and Medicare. These programs help millions of Americans afford their medical care, many times retroactively depending on an individual’s health issue and income.
The fact 12 million Americans are no longer covered under employee-based healthcare shines an intense spotlight on the need for accessible and affordable healthcare in our country, as well as universal medical debt management regulations and assistance. During this time consumers should not have to decide between healthcare and basic human needs. First, consumers need to look at existing assistance and specific medical programs offered at state and local levels, in addition to working with medical providers on reducing costs and agreeing on affordable payment plans.
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