Medical services can be expensive, and if you don’t have insurance or the service isn’t covered under the plan, you will receive a bill and may not have the money to pay. If this happens, the bill will hang over your head until it’s settled. If the debt is high, it can affect your financial situation and financial future. If there’s an outstanding debt, it’s essential to know a few things about medical debt collections.
Your Bill Can Be Sent To Collections Even If You’re Making Payments
If you can’t afford to pay your medical bills in full, making payments will show the provider will see an effort is being made. However, there is no guarantee the account won’t be sent to a reputable medical debt collection agency.
Collections can be prevented by communicating with the provider to find out if they have payment plans available. Some providers will work with you, and they won’t add interest once the payment plan is set up. Even if they continue charging interest, it can still keep the bills out of collections.
Insurance Doesn’t Cover Everything
Regardless of how much you pay for medical insurance premiums, it won’t cover everything. According to the American Academy of Family Physicians, there are two main categories that may not be covered by insurance.
- The service isn’t deemed medically necessary. Any service that isn’t essential to a person’s health, such as cosmetic surgery and fertility treatments, won’t be covered under the insurance. If the insurance company decides a service or procedure isn’t medically necessary, you will receive a bill.
Non-covered services. Every insurance plan is different, and your insurance may not cover the same things as a friend’s or neighbor’s insurance. If a medical professional provides a service or procedure that isn’t covered by the insurance, you will receive a bill.
The best way to avoid medical debt for services or procedures is to call the insurance company yourself or have the provider check with the insurance first to determine if it is covered. If it’s too late to speak to the insurance company and the service or procedure has already been performed, you could receive a bill you can’t afford.
Medical Bills and Your Credit Score
Medical debt has always been reported to the three main credit bureaus, affecting your credit score. According to CNN, Equifax, TransUnion, and Experian have stated that they will start eliminating negative credit impacts due to certain medical debts. These changes are expected to remove up to 70 percent of medical debt on credit reports.
If a person has medical debt under $500, it will be excluded from the credit report. Anything higher will no longer show up on the credit report after six months, and you will have a year to pay off the debt before it’s reported to a collection agency. In many cases, a year is plenty of time to pay down the debt and even eliminate it altogether.
The more you know about medical debt, the more you can be done to prevent going into debt in the first place. A reputable medical debt collection agency can help solve the problem if you have medical debt in collections. Some collection agencies will offer a payment plan, and some will offer a settlement to help save money on medical debts if you can afford to pay the settlement offer in full. There are options available, and you don’t have to allow medical debts to impact your financial future.
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