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Medical Bills: Finding the Right Help Is Critical for Eliminating Debt, Says American Financial Solutions

When Mrs. Ramirez met with American Financial Solutions’ certified credit counselor Carmen Perales, she and her husband owed $30,000 in medical bills. Perales worked with the family to establish a budget and to understand all of their expenses, but that was not all they accomplished. 

The Supreme Court’s recent ruling in favor of the provisions of the Patient Protection and Affordable Care Act (ACA) (visit our website to learn more), provides multiple benefits for consumers. Free preventative care, no waiting periods for care, and no maximum amount of benefits someone can receive in a lifetime. However, those benefits may come at a higher price for other services. Some insurance companies, medical providers and pharmaceutical companies are struggling to reduce their expenses and find a way to shift their increasing costs to consumers. 

Every day, American Financial Solutions (AFS) assists people overwhelmed with medical debt. According to Becky House, Education Director for AFS, “Nearly everyone we counsel has some sort of medical debt. If it has not been paid, it shows up on their credit report. If it has been paid, it may be hidden in the debt on their credit cards.” 

In a study published in 2010 by Demos, a non-partisan public policy research and advocacy organization, and The Access Project, a resource center for local communities working to improve health and healthcare access, households with medical debt carried an average of $11,612 in credit card debt. Of that amount $2,194 is attributed to healthcare expenses.

In March of 2012, the  Centers for Disease Control released a report stating that in 2011, “one in three persons was in a family experiencing the financial burden of medical care. One in 5 persons was in a family having problems paying medical bills, 1 in 4 persons was in a family paying medical bills over time, and 1 in 10 persons was in a family that had medical bills they were unable to pay at all.” 

Mrs. Musgrove came to American Financial Solutions in 2007 looking for help to rebuild her credit after filing bankruptcy to eliminate $68,000 in medical expenses. “Before the bankruptcy, I was actually borrowing money from family to pay collection agencies. I couldn’t keep up with the bills. I wanted to pay for the services, but no one would take payments. They all wanted the entire amount - now. I didn't know there was help available.”

As for the Ramirez family, their story ended very differently. After reviewing the family’s financial situation, Ms. Perales encouraged them to contact the hospital to whom they owed money and seek charity care or financial assistance. They did and based on their income and family size, the Ramirezes qualified for charity care and the entire debt was eliminated. 

Both of these families provide an example as to why it is important to know your medical debt repayment options. 

As shown in the Ramirez case, resolution of medical bills does not have to end in bankruptcy or with accounts sent to collection agencies. American Financial Solutions recommends exploring all options for handling the debt. Below are some tips: 

1.Talk to the medical provider and ask for a reduced rate. If possible, ask before receiving care.

2.Ask the medical provider for a payment plan. Explain your financial situation and let them know what amount is affordable.

3.If you or someone in your family received care at a hospital, ask about the Charity Care or their Financial Assistance policy. Many hospitals can reduce or eliminate the debt if your income falls below a certain level.

4.Before using a credit card to pay the debt, consider how much it may cost you in additional interest. Also make sure you can comfortably make the new payment. Make sure it fits within your budget. 

5.Talk to a non-profit certified credit counselor. Credit counselors may help you with debt consolidation, a budget, and can help you explore other alternatives as well.  Click here to learn more about our debt consolidation services.

American Financial Solutions (AFS) is a non-profit 501(c)3 financial education and credit counseling agency that helps people find solutions for managing their money and improving their financial lives. Since 1999, AFS has helped individuals across the United States through one-on-one counseling, classes and the use of debt management plans. AFS is a member of the National Foundation for Credit Counseling (NFCC) as well as the Association for Independent Consumer Credit Counseling Agencies (AICCCA). AFS is also accredited by the Council on Accreditation (COA) and has an A+ rating by the Better Business Bureau. Find us and add us on Facebook,  Twitter and  Google+.

Published Jul 3, 2012.