How Does Medical Debt Collection Work?

Posted by NSB Staff on Nov 30, 2020 5:02:18 PM


Having medical debt is emotionally draining. It puts more of a strain on people than other kinds of debt. Knowing how the system works can help you manage it before it becomes a severe issue.

If you seek help now, it could save you a ton of money down the road. You do not want to ignore your debts either, as dealing with them quickly is best.

In this article, we are going to cover the process of medical debt collection. 

Know That Your Insurance Doesn’t Cover Everything

You must realize your insurance is not going to cover all of the expenses of your hospital stay. You need to know what portion you are responsible for paying. Many people believe that their insurance covers all of their medical costs.

When people think that, their bills often go unpaid. When you do not pay your bills, you might have to deal with a debt collection agency.

Before you get to that point, check your Explanation of Benefits (EOB) that your insurance provider sends you. This receipt will let you know precisely what was covered and what was not. From there, reach out to the hospital and insurance company if something is not adding up.

Your Medical Bills Can be Sent to Collections While You Pay

Sadly, you might be paying your medical bills, and they still end up in collections. If your payments are small or late, the hospital is more likely to turn them over to an agency.

The Affordable Care Act makes it so you have more time to apply for financial assistance, but any unpaid debt can still be in collections.

If you want to avoid this, be sure that you have a payment plan set up with your hospital- and ensure you have a written copy of the agreement. Doing so can be beneficial to both of you, so they will likely agree to it.

It’s Different Than Other Debts

Medical bill debt is handled differently than other types of debts. They have less impact on your FICO score, although they might still make it harder to get credit later.

The grace period that comes with medical bill debt is also longer. You get 180 days before the debt affects your credit report. During that time, you should be trying to work out a payment plan to lessen the impact.

How to Deal With Medical Bills During the Pandemic

With the current pandemic, how people handle medical bills is drastically different when compared to the past. Hospitals and the government are trying to make it easier for sick people to get the care they need during this time. 

If your financial situation was affected by the pandemic, you would want to talk with your provider early on, especially if you have doubts about paying the medical bills.

When you actively speak up, medical staff can assist you in finding funds. Medical providers want to help you with your bill and make the process easier for you, so do not be afraid to ask them any questions that you might have.

Why Your Bill Went to Collections

When a medical bill goes to collections, likely, the person did not realize they were responsible for paying. Many people believe that their insurance covers everything- however, this is rarely the case.

If you make sure to pay the hospital bill on time, the hospital will not send it to collections. What happened was you might have missed the payment date and were very late.

Even if your unpaid medical bills are sent to collections, you have a 180 day grace period. That means you can pay now, and the medical debt will not show up on your credit score. If it shows up on your credit record, you have not made any payments in a long time.

If you are unsure about why your bill went to collections- call the hospital immediately. There is always the chance that someone is pretending to be a debt collector to scam you.

You Can Get Medical Debts off Your Credit Score

Medical debts negatively impact your credit score, but you can remove them. There are a few different ways that you can do this. 

First, ask your insurance company to pay the debt. If they do, it will be removed from your credit report. 

Secondly, you can always dispute the medical bills. Ensure that everything on the invoice is accurate, and if not- you should challenge it right away.

Topics: Medical Collections