SENIOR ARTICLE – January 2020

(You have rights and you have options. Be aware of them)

Medical expenses were a contributing factor for those that could not pay their medical bills or filed bankruptcy according to the American Journal of Public Health. The National Council on Aging surveyed social service professionals about their clients’ debt, more than half said medical debt was the biggest problem facing older Americans.

You may not be able to avoid medical debt, but you can navigate it better – Here are Five things to know:

  • Initially you have more leeway. Most medical debt is held by hospitals and doctors, whose practices are not structured that you are charged “interest.” Hospitals don’t charge “late fees.” This gives you time to figure out how to manage the debt. Also, when missed payments on a credit card can affect your credit score, the three major credit reporting agencies – don’t report medical debt that is less than six months overdue. They also remove from your record medical debts that are later paid by insurance.
  • Hospitals can reduce your burden. If you owe money to a hospital, ask if you can qualify for help paying it off. Under IRS rules, nonprofit hospitals must have charity care and financial assistance polices in place to help low-income folks. (Definitions of “low-income” can vary). Both profit and nonprofit hospitals offer financial assistance to people with income up to 300 or 400 percent of the federal poverty line (income up to $37,000 or $50,000 for one person, and $51,000 or $68,000 for a couple). If your hospital or doctor doesn’t have a program to help pay off your debt, talk your situation through with them. Many agree to a payment plan! Prevent the debt going into a collection agency. As long as you communicate and show good faith in managing the debt, they will help keep your debt in-house.
  • Replacing debt with debt could make things worse. Do Not Take Out a Home Equity Loan or Reverse Mortgage to pay off a medical debt – that puts your home at risk unnecessarily. Do not put your medical debt on a regular credit card or on a medical credit card because once the debt is on a credit card, you lose the ability to negotiate with your doctors or hospital on repayment. If your income is low enough, you might qualify for Medicaid and you may be able to get retroactive coverage from Medicaid for recent bills.
  • Collectors have to follow rules. Once a provider decides you cannot or not likely to pay what is due, they may have a Debt Collector take over. Under the Federal Fair Debt Collection Practices Act (FDCPA), collectors can’t “harass, oppress or abuse” you in connection with collecting a debt. But, Collectors can go to court to collect the debt. If they win, they can garnish part of your wages, but your Social Security and VA benefits are protected! State laws set a “time limit” three to six years, for them to file suit, but making a small good faith payment may extend that window.
  • You may not owe anything. If debt collectors call you regarding your medical debt, don’t assume their info. Is correct. Under the FDCPA, you have 30 days after a collector contacts you to ask for proof that actually owe the amount demanded. Medical debts can be bundled and sold multiple times to different collectors and mistakes are not uncommon.

Hopefully, these Five Steps will be helpful. After doing my research on this topic, the AARP Bulletin provided some of these guidelines.

Brenda Dever-Armstrong, CEO/Owner
The Next Horizon Seniors & Military Advocate/Resources