Article by: Pam Huntington
Employee Benefits Specialist – Insurance Trust
I have been in the health insurance arena for many years now, but in one of my prior roles, I was a Collections Manager at a credit union. It was staggering to see the amount of credit reports with medical debt collections. The stark reality is all of us are only one sickness or accident away from needing our health insurance benefits.
With the rising cost of care and health insurance deductibles, we could be faced with large out-of-pocket expenses. In a recent article from Benefits Pro regarding health care debt, it states that in the past five years more than half of U.S. adults reported they’ve gone into debt because of medical or dental bills. 100 million people in U.S. saddled with health care debt | BenefitsPRO
There are some options, and one we are seeing more folks doing is applying for Care Credit. I know my family has personally used this for larger-than-expected orthodontia care. Care Credit often allows you up to 24 months of interest-free payments, and you can set those payments to automatically pull from your Health Savings Account (HSA).
A helpful consumer tip with Care Credit. Their monthly statements can be a “little tricky” as they continually show a lower amount due after a payment has been made. It could be tempting to just pay the minimum payment each month but at the end of the term you may not have paid your balance in full. Consequently, you could end up owing interest charges on your entire initial balance at rates in the 20%+ range!
If you find you have a debt that has gone to a collection agency, here are some tips that can help you navigate the process. First, keep the communication lines open with the collection agency and often you will find the outcome will be better. The collection agency does reserve the right to place the account on the consumer’s credit report. As the consumer, you can always ask the collection agency to keep the account from being reported to the credit bureaus while you are in repayment as a term of repayment. The collection agency, however, is under no obligation to do so. Remember, the answer is always no unless you ask the questions.
If the collection agency reports the medical collection to the credit bureau, the consumer has another option available to them. Once they pay the account in full, they can ask the collection agency to remove the account completely from their credit report. Again, the collection agency is under no obligation to do so, but I have found many are willing to do this once the account is paid. You may soon have some medical debt wiped from your credit report: Here’s why (msn.com)
As always, make sure you are reviewing the bills you receive from your providers to be sure they match what the carrier states is your responsibility on your Explanation of Benefits (EOB). Your Employee Benefits Team is always happy to help review these with you.