Several states have recently enacted laws to help alleviate the burden of medical debt for individuals who are low-income and who are struggling to pay these bills. At least 10 states, including Maine, Maryland, New Mexico, and Connecticut have passed with provisions in them that heavily affect healthcare providers and third-party debt collection agencies. These provisions include requirements for hospitals to give financial assistance to patients with lower incomes and to limit the aggressive collection practices used to collect on these debts.
According to a recent study of credit reports from Transunion, medical debt is the largest source of consumer debt currently in collections. In fact, when compared to all other types of debt, medical bills surpass both credit card and utilities in terms of other debt being collected.
Medical debt collection has come under scrutiny recently, especially when the collection tactics are particularly aggressive. Even with assistance under the Affordable Care Act (ACA), many American consumers are still not financially able to pay their medical bills. Approximately 19 percent of all U.S. households owe some type of medical debt. The median amount of debt owed was $2,000.
One of the reasons so many Americans struggle to pay medical bills is the high deductibles they need to meet under their current insurance plans. Many patients find themselves paying large sums of money for even basic medical services. If they are not able to pay these bills, they find themselves on the receiving end of demanding collections calls.
Disturbingly, many hospitals have disclosed that patients who would otherwise qualify for financial assistance to pay these high bills do not receive it, even though they are eligible for it. Many times, the patients will receive information about the availability of this assistance but fail to apply for it because the process can be confusing and burdensome.
Certain federal laws have been enacted to protect consumers. Under the ACA, nonprofit hospitals are required to have financial-assistance policies. Further, under the recently passed No Surprises Act, patients have been given protection to shield them from surprise medical bills. Even with these laws, many consumer advocates and state legislators argue that hospital-billing protections still have significant gaps in coverage.
One example involves the level of discretion nonprofit hospitals are given in creating their own standards for eligibility for financial assistance. The requirements given to nonprofit hospitals also do not apply to for-profit hospitals or government-run hospital facilities. Certain states do have hospital billing requirements in their laws, but a large number of them do not have these restrictions, which is why several states have recently decided to create their own legislation to help fill this gap.
The laws recently passed cover a number of areas, including mandating financial assistance for patients based on their income levels and requiring hospitals to first check patient eligibility for financial aid before forwarding their outstanding bills to collection agencies. This new legislation also includes provisions to prevent collection agencies from using tactics such as putting a lien on a patient’s home for nonpayment of a medical bill. Top of Form
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Those who have experienced illness or injury and found themselves overwhelmed with medical debt should contact an experienced Miami bankruptcy attorney. In bankruptcy, medical bills are considered general unsecured debts just like credit cards. This means that medical bills do not receive priority treatment and can easily be discharged in bankruptcy. Bankruptcy laws were created to help people resolve overwhelming debt and gain a fresh financial start. Bankruptcy attorney Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken, P.A. website at www.miamibankruptcy.com.
