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How to get rid of medical debt

Avoid Situations That Lead To Medical Debt Settlement Or Collection

If you do not pay your debts, medical or any other for that matter, it will go to the collections for sure. It is also certain that you will receive calls and emails from them asking you to make the payments. These collection agencies in no way work towards your benefits and interests because it is their primary objective to collect the debt amount that you actually owe to a creditor from whom they received your account.

It is highly unlikely that they will settle for anything less than you owe and therefore chances for debt settlement and consolidation are bleak in such situations. There are a few specific ways in which you can avoid such situations to arise in the first place.

Debt collection agencies must indeed abide by the state and federal laws that are designed to protect the consumers from any unfair collection practices. Therefore, if you find that a debt collector is pursuing you to the extent of harassing you, you must follow these useful steps as under:

Consult an attorney and research all available legal protections and rights that you have to prevent it. You may even have to file a legal complaint against them for their practices that are haunting you day and night as well.

However, these collections agencies are accustomed to such situations and will find a way to harm your credit report and even pursue legal avenues on their part and force you to pay. In such situations, you should ask the collection agency to explain everything to you in detail and specify the amount of debt.

You have the right to contact your original medical provider to verify this amount specified by them as often they will claim for more.

According to several studies, it is found that more than two-thirds of the people facing problems with high medical bills and collection issues complained to federal regulators stating that the collection agencies pursued them to pay the money they actually did not owe to the original medical provider.

Assuming that you avoid these collection issues by opting to meet your creditor for negotiating your medical bills to reduce it to your affordable limits, once again there are a few possibilities and risk in here as well such as:

  • You may not get a favorable response
  • You may get any reduction at all and
  • It may hurt your credit score.

Assuming once again that you have gone through several debt settlement reviews and found that it is better to pay off the medical bills with your credit card and then consolidate your credit card debts. You may even opt to take out a medical debt consolidation loan to pay off your medical bills. Once again, you have the liability factor to repay this loan on time or risk harming your credit score.

Ways to avoid such situations

That means, either way, you still have some risks to face and worry about. The best way to avoid such risks and make your medical bills affordable is to follow these simple yet effective ways.

First, you will need to do some homework and all of these should be done even before you visit the healthcare provider. This will include:

  • Keeping your health insurance in the right order without any breaks
  • Know about and get treated by the medical providers that are in-network with the insurance company and
  • Stay on top of and in the loop with your claims to ensure proper and faster processing

Most importantly, you must shop around for the best healthcare facility especially if you know that the treatment procedure is highly expensive and involves a lot of tests and possible prolonged treatments.

  • Secondly, you should try to get the lowest possible medical bills. For this, you will need to negotiate with the healthcare provider to waive off some amount and offer a new and extended payment plan.
  • Thirdly, once they agree to your request or even disagree with it, you must look for resources and options that will support your payment. A few of such options include Medicaid, local and state medical subsidies and reliefs, Children’s Health Insurance Program, and others.
  • Next, you should consider the tax implications related to the consolidating of your medical bills. If you have effective planning there is a high opportunity that you will be able to reduce your tax bill.
  • Follow this by checking your insurance policy. Assuming that you have a high-deductible insurance policy, you must start building a Health Savings Account or HSA. You can use this money from this pretax account for meeting your medical bills at any time. The good thing about this account is that any amount that is left unused will be carried over to the following year.
  • Next, consider your discretionary income, and if you have enough of it make sure that you put the family or annual maximum individual amount into your HAS. The good thing about it is that such an amount will be deducted from your gross income and this not being the taxable amount will reduce your tax burden as well at the same time.
  • Lastly, if you anticipate any large medical expense to be made out of your pocket one time in addition to all of the above, you must make sure that you plan your treatment right at the beginning or end of the alternating years. This will ensure that you have enough amounts as your medical expenses in that given year which will be most likely to be well above the minimum for a Schedule A medical itemization.

When you have a Schedule A medical itemization deduction it will change the tax implication entire. Once again, this excess amount will be deducted from your gross annual income and therefore will reduce your tax liability by a considerable margin. At this point, you should remember that for tax purposes the medical expenses that occur during the time of treatment are considered and not when you actually pay the bill.