• 19
  • September
    2011

In Florida and across the country, medical bills remain one of the main causes of bankruptcy. About 1 in every 5 people who seek credit counseling identifies medical debt as the main reason for choosing to file for bankruptcy.

Over a year after the passage of federal health insurance reform legislation, that number is still not going down. In fact, it's gone up by 13 percent in the last two years, according to data from CredAbility, a nonprofit group that provides credit counseling.

Certainly the high unemployment rate is one of the issues that underlie the problem of medical debt. After all, people who lose their jobs typically lose their employer-provided health insurance as well.

Yes, it's conceivable to get insurance on the private market. But the premiums and deductibles available there are often pretty hefty compared to the terms available through employers.

Another aspect of the problem is the speed with which hospitals and other healthcare providers hand off medical debt to collections agencies. Hospitals and clinics frequently show little patience with slow payments and respond by quickly referring the bills to collection agencies.

Using a credit card to settle your medical debt may be just exchanging one problem for another. It doesn't matter whether the amount is added to an existing card or whether a new card is opened. Either way, it can be a problem.

Don't let healthcare providers push you into just putting everything on a credit card. It makes sense to ask in advance about payment plans. Indeed, you could even ask about getting the bill reduced, based on your circumstances and ability to pay.

Source: "Don't Let Yourself Get Hurt By Medical Debt," Forbes, 9-8-11