Finding financial assistance in order to pay leftover hospital and medical bills requires creativity. The few programs that do exist come with different labels and confusing rules.
The options for the uninsured are the thinnest. The Affordable Care Act was passed so that nobody would have to face this problem. A settlement program and a loophole in the ACA can assist.
Two federal government programs provide help reducing the size of copayments and deductibles. Tax saving opportunities benefit higher income families most, while subsidies benefit lower income families more.
Once your unpaid hospital or medical bills reach the collection agency two other options emerge. The statute of limitations time bars lawsuits and bankruptcy offers permanent relief.
Help Paying Medical Bills without Insurance
It will be very difficult to find help paying your hospital or medical bills if you experienced a health event without insurance. The Affordable Care Act requires all citizens to purchase a policy and imposes penalties on those who do not.
If you rolled the dice by going uninsured and lost, it will be difficult to find a sympathetic ear. Settlement programs, disability programs could make a difference.
A debt settlement program often offers the best form of help paying medical bills for patients without insurance. Two common scenarios often come into play for the uninsured needing health care.
- The first qualification is that you owe more than $10,000 in unsecured debt (credit cards, personal loans, and unpaid medical bills). A single overnight stay in the hospital will often run that much or more.
- The second qualification is that you must be experiencing a financial hardship. Many people are unable to work after their health event. Lost income makes it very difficult to stay current on routine obligations. Add a large hospital bill into the mix, and the task becomes impossible.
Buy individual health insurance. You do not have to continue paying your future medical bills without insurance. Enroll in a new plan that immediately covers your pre-existing health condition with no waiting period.
You can enroll anytime if you experience a qualifying life event. A qualifying life event includes the loss of your existing group, individual, or student coverage. You can also enroll any time if you are no longer eligible for Medicaid, Medicare, or a CHIP program. The same applies if you turn 26 and lose coverage under your parent’s plan.
Anyone begin coverage during the annual open enrollment, which begins in November of each year. The new plan will be effective in January of the next year.
State-mandated temporary disability programs can help disabled workers with medical bills by replacing a portion of income. The benefits last for six to twelve months depending on the state. Unfortunately, only five states require this benefit. They are California, Hawaii, New Jersey, New York, and Rhode Island.
Private short-term disability also assists disabled worker with medical bills by replacing a portion of income. The benefit can last up to 24 months depending on what the individual or employer group chose at the time of application.
Unfortunately, you must purchase a private policy before becoming sick or hurt. A new policy will exclude any preexisting condition for at least twelve months.
Help Paying Medical Bills after Insurance
Many people need help to pay medical bills after insurance processes the claim. As the cost of health care spirals upward, plan designs leave member with a greater share of expenses. Cost-sharing features such as copayments and deductibles add up quickly.
A personal loan approval can help you obtain funding to help with insurance copayments and deductibles. An ounce of prevention can keep the bills from falling into the hands of a collection agency.
Many patients with chronic health conditions need financial help with the copayments leftover after insurance processes the claim. A co-pay is a relatively small fee that the member must reimburse when incurring a covered medical expense.
A one-time copayment of $25 or $50 is no big deal. However, the numbers add up quickly for those needing ongoing medical supplies or taking a large number of different prescription drugs.
- Diabetes patients incur regular co-pays for insulin and testing kits
- Cancer patients frequently incur co-pays when taking chemotherapy drugs
Because of the ongoing predictable nature of the copayment exposure for those with chronic conditions, a flexible spending account is the best place to turn for aid.
Patients will find it most difficult to find help paying hospital bills connected with their deductible after insurance processes the claim. The deductible is a contracted amount established by the issuing company. The amount is non-negotiable.
The member agrees to cover the deductible when buying the policy. He or she enjoys a much lower monthly premium when choosing a plan with a larger deductible. The member keeps the very significant premium savings when nothing bad happens.
Insurance deductibles of $10,000 or more are becoming more common. A family experiencing a short hospital confinement could easily reach this figure. Because of the very large size and surprise nature of the expense, taking tax savings on Schedule A is often the best place to turn for aid.
Government Tax Savings
The federal government offers financial assistance for medical bills for higher income families. They do so via two tax savings programs that help with insurance copayments and deductibles.
- Flexible spending accounts (FSA) provide government support with copayments for patients with chronic health conditions. They provide first dollar tax savings on expenses up to roughly $2,500 each year. Because of the use it or lose it rule, an FSA works best for predictable expenses such as ongoing costs for medical supplies and maintenance prescription drugs.
- Tax deductions (using Schedule A) offer government support on large deductibles for patients that experience one-time emergency hospitalizations or other health events. They provide tax savings for amounts above 10% of adjusted gross income. You have until April 15 to file the combined expenses for family and individual deductibles.
The federal government also provides help to minimize insurance copayments and deductibles for low-income families. Cost-sharing subsidies reduce exposure by increasing the actuarial value of silver-level plans. Silver level plans cover approximately 70% of expected medical expenses.
The actuarial value is the percentage of medical expenses that your plan covers. You plan copayment, coinsurance, and deductible determines its actuarial value. Low-income families qualify for the most aid with these leftover expenses.
|% Poverty Level||Actuarial %|
|100 – 150%||94%|
|150 – 200%||87%|
|200 – 250%||73%|
Low-income families earning less than 100% of the federal poverty level should look into Medicaid in their state. In many states, Medicaid will cover past charges for up to three months retroactively.
Financial Assistance Medical Bills in Collections
Break out the big guns when seeking financial assistance for unpaid medical and hospital bills in collections. The stakes are much higher once the obligation falls into the hands of the collection agency. They collect debts for a living and run a mean business.
Collection agencies may threaten to take you to court. If they win the lawsuit, the court will file a judgment allowing the collections agency to place a lien on your home or other personal property, and/or garnish your wages.
The statute of limitation and bankruptcy laws can support you with medical debt in collections.
Statute of Limitations
The statute of limitations (SOL) in your state time bars the collection agency from filing a lawsuit. Unpaid medical debt is a written contract. Look up the statute of limitations for written contracts in your state to learn your rights.
Once the SOL expires, the collection agency can no longer file suit. You still owe the money. However, the agency has lost its most significant advantage.
Filing bankruptcy is the final form of legal financial assistance for medical debt in collections. Studies show that health events trigger more than half of all bankruptcies in the United States. Most people filing had health insurance in place before they become sick or suffered an accident.
- Bankruptcy chapter 13 allows individuals with regular income to restructure their obligations. You can propose a plan to retire all or some of your debts over three to five years.
- Bankruptcy chapter 7 is a liquidation. Trustees will gather all of your non-exempt assets and sells them. They then distribute the money to your creditors.