Paying Off Medical Debt

If you think credit card debt is the biggest debt Americans have, think again. Americans are paying three times as much on medical debt accounts in collections than credit card debts in collections. Even those who have health insurance have struggles with high costs of medical care.

You may want to forget about the medical bills showing up in your mailbox. They may only be reminders of something you’d rather not think about. But ignoring them can have serious implications.

For this reason, paying off medical debt is a legitimate reason for selling payments. The potential damage to your credit score and the possibility of having legal action taken against you far outweigh the loss of income your annuity provides.

You can be an active part of ensuring medical debt doesn’t pile up. Taking these steps can help your financial health while you work on your physical health.

Often, patients can ask questions to negotiate how much they spend on treatment. Patients can also simply ask about the costs upfront. Three-quarters of consumers say they’d make better health decisions if they were informed of medical costs before receiving treatment. Sometimes, for instance, blood work can be done all at once to reduce costs, rather than spread out over months.

Their non-profit status is based on them providing free or discounted health services to patients who qualify. More than 70 percent of those with medical debts aren’t offered such assistance outright. If you know you’re in a bind medically, make sure you ask your hospital if you are eligible.

A 2012 study from the Institute of Medicine revealed that roughly 30 percent of health spending in 2009 went toward “unnecessary services, excessive administrative costs, fraud, and other problems.” Spending a few minutes performing an audit of your medical bills can save you from overpaying or even paying for procedures and tests that never happened. For instance, sometimes a hospital can charge for a medication, accidentally putting on the bill that they gave it to you three times a day when in reality you only received it once a day.

It’s important to carefully consider your options in paying off medical debt. Medical debt is not reported to the credit reporting agencies until it becomes delinquent. Once in the hands of a third-party collection agency, it begins to impact your credit, and thus your financial future.

If you have an annuity or a structured settlement, you can sell payments to get out of debt.

Some people may look to liquidate assets in order to get out of debt. For example, 11% of Americans have cashed out a retirement account to pay for medical expenses. Credit counselors advice against taking a loan against your home to pay for health care bills. For most Americans, your home is your most valuable asset.