Medical Debts

Struggling with Medical Debt? Here Are 6 Places That Could Offer Relief

Medical debt is a significant issue in the U.S.. In 2024, approximately 31 million Americans, or about 12% of U.S. adults, took on loans or used credit cards to pay their medical bills, with an estimated total borrowing amount of $74 billion. If you find yourself grappling with medical debt, there are various options available that could help you manage it, or even eliminate it.
Here are six avenues to explore for potential medical debt relief:

• States Offering Medical Debt Relief Based on Income or Law

   ◦ Some states and counties offer medical debt relief, often for those whose debt has been written off by collectors as "uncollectable".
    ◦ Vermont, for example, has a recent law designed to eliminate up to $100 million in "uncollectable" medical debt for lower- and middle-class residents. This law also aims to remove such debt from individuals' credit scores.
    ◦ In Orange County, Florida, an estimated 310,000 residents are expected to have $472 million in medical debt wiped clean. To qualify, individuals must have medical debt equaling or exceeding 5% of their household income or fall below federal poverty guidelines.
    ◦ Los Angeles County also has a Medical Debt Relief Program, which eliminated over $183 million in medical debt in its first round.
    ◦ It is advisable to check with your specific state or county to see if such programs exist, as qualification may depend on the amount owed or your income threshold.

Charitable Foundations

  ◦ Certain charitable foundations, community groups, or churches may offer assistance with medical debt.
    ◦ Even if they cannot fully eliminate the debt, it's worth checking what support they might provide.
    ◦ Some states have laws that require hospitals to offer "charity care," which includes free or reduced-price services, to qualifying individuals.

Debt Management Plan Through Credit Counseling

◦ A debt management plan is an arrangement you set up with a credit counselor to help you get control of your debts and pay them off over time.
◦ While you remain responsible for your medical debt, you might be able to secure a lower interest rate than if the debt were on a loan or credit card.

Billing Department

◦ While a hospital's billing department is unlikely to completely eliminate your medical debt, you may be able to negotiate the balance down.
◦ According to Dr. Noor Ali, founder at Dr. Noor Healthcare Advisor, practices often prefer to receive some payment rather than no payment at all.
◦ You can also directly contact your provider, who might offer payment plans or a reduction in the amount you owe

Debt Settlement Company

  ◦ Debt settlement should generally be a last resort, but it can provide relief in dire situations.
    ◦ It's crucial to select a legitimate company. Reputable firms are regulated by the Federal Trade Commission (FTC) and aim to lower the principal balances owed. They can negotiate with medical providers for debt incurred directly with them, as well as with credit card companies.
    ◦ Be aware that debt settlement can negatively impact your credit score, and companies may charge expensive fees. Additionally, you might be required to pay taxes on the amount of debt that is forgiven

Patient Advocacy Company

◦ If you need assistance with filing a claim against an unexpected medical bill with your insurance company, a patient advocacy company can be helpful.
◦ For example, Neal K. Shah, CEO at CareYaya Health Technologies, mentions that companies like Counterforce Health provide free resources to help patients navigate the appeals process and challenge denied claims