Consumers are being provided with a new playbook on how to handle unpaid medical debts that are placed with collection agencies, as part of a new report from the U.S. PIRG Education Fund and Community Catalyst that aims to inform consumers about their rights when it comes to medical bills.
A copy of the report can be accessed by clicking here.
Among the different topics addressed in the report are:
- I have health insurance and need emergency care
- I have health insurance and need to schedule hospital care
- I am uninsured and need medical care
- I received a bill and can’t afford to pay
- I am unable to pay for my care up front
- My unpaid medical bill was sent to a collection agency
For individuals looking to learn about their rights when an unpaid medical bill is sent to a collection agency, the report discloses that collectors are allowed to contact individuals to collect on bills that they owe and are allowed to file lawsuits to recover the money. If they win the lawsuit, they can garnish the individual’s wages or put a lien on their home. But, those collectors have to follow certain rules, like verifying the debt belongs to you and not attempting to collect on an illegal surprise medical bill until the dispute is finalized, along with limitations on how often individuals can be contacted.
The report provides information about how medical debt may impact an individual’s credit score and the questions that individuals should ask when contacted by a collector. In the event an individual is not happy with a collector, the report also lays out how a complaint can be filed with the Consumer Financial Protection Bureau.
Individuals are also advised to not use credit cards to pay for medical bills because doing so removes the incentive for a healthcare provider to negotiate a lower balance because they have already been paid in full, and because interest starts accruing on the unpaid debt right away (whereas setting up a payment plan with the provider likely will not include any interest), and because consumers have more protection when it comes to medical debt than when it comes to credit card debt.