RIDGELAND, MS (WLBT) - An unexpected doctor visit or hospital stay can result in big bills, even if you have insurance. Mississippi has the country’s highest concentration of people with past-due medical debt -- 37.4 percent, according to a recent study by the Urban Institute. The national average is 23.8 percent.
Americans are used to going into debt to buy a house or a car, or to go to college, but medical expenses are often unexpected. Their timing and size can force some people into bankruptcy.
“Your student loans and your mortgage payment are super-predictable. You know about that years in advance," says Ryder Taff, a financial planner with New Perspectives in Ridgeland. "Medical debt, almost by definition, is going to surprise you, and it’s going to be bigger than you expect, because it’s something you couldn’t plan for.”
Consumer Reports says nearly 30 percent of Americans had unpaid medical debt turned over to a collection agency in the last two years. One-fifth of Americans say their credit score has been negatively impacted by unpaid healthcare bills. They’re simply struggling to pay what they owe -- in some cases, even after insurance has paid at least a portion of their bills.
Taff says you stand a much better chance of surviving financially if you take action before your bills are sent to a collection agency. He says you should call the hospital or doctor’s office you owe and tell them what you’re up against.
“Medical debt is some of the most negotiable debt there is," he says. "If you think about it, your insurance company just sits around negotiating medical costs with the hospital. They’re used to this stuff getting negotiated.”
Taff says they might be willing to lower the amount you owe. At the very least, work out a payment plan that you know you can handle.
“If it’s something that you can’t just pay out of pocket straight away, get on a payment plan with the hospital," he says. "You don’t want them sending that to collections.”
Taff says most hospitals will not report you to the credit-monitoring agencies, but debt-collection agencies will. After that, even if you pay, it will still affect your credit score.
There are some new regulations that could help. If insurance eventually covers the disputed amount, it must be removed from your credit report; however, it’s up to you to make sure that happens. Another new rule says the credit-monitoring agencies must wait 180 days before putting an unpaid bill on your credit report. That gives you and your insurance company a little more time to figure things out.
“With any debt, and especially with medical debt, you have to stay on top of these things," Taff says. "Even if your insurance company is going to deal with it, make sure you know where it is in the process.”
“Hospitals don’t want you to go bankrupt because of this," he says. “They want to get paid as well, so they’re willing to work out a payment plan. Debt collectors don’t want you to go bankrupt; they want you to pay those bills, so that’s why they’re willing to negotiate payment plans. That’s why they’re willing to shave something off the bill.”
Good communication is also essential. "Even once you start a payment plan, being in good communication with the party you’re paying is important,” says Taff.
There are a number of online resources that can help: