On Your Side Alert: New Study on Medical Debt
A new study by Clear Point Credit Counseling Solutions and The Kaiser Foundation says 1 in 3 Americans report having difficulty paying their medical bills.
Rebecca Gershowitz, with Clear Point says the research revealed a surprising fact.
"It was really interesting to find out that most of those people are people who carry insurance right now. Typically, when you think of medical problems and medical debts, you think of the uninsured," said Gershowitz.
Gershowitz says medical debt usually leads to other financial problems. A major concern involves people using credit cards to pay off medical debt. Credit counselors say this does not erase the bill, but it can cause more financial hardship. Instead of just the medical bill, consumers have transferred the expense to a card with potentially high interest.
"These people are facing foreclosure because they are opting to pay medical bills instead of their house payment, they are pulling money from their retirement plans. So they are depleting those reserves and having tax consequences in order to cover medical debt," said Gershowitz.
Credit counselors say a good way to avoid this type of debt is to maintain good health and visit a doctor for regular checkups. If things are getting out of control, counselors say to ask for help.
"The first thing that we would recommend is to contact your medical billing offices. Even if you don't qualify for a financial hardship plan, just the process of asking for help can allow them to offer an extended payoff period," said Gershowitz.
Counselors also remind consumers that medical debt typically does not hurt a credit score unless it is turned over to a collection agency. It is important not to ignore the bills; even paying a little can help.