Everything you own, all that you worked hard to save up and buy all the money in your bank account, your wages, even your home, every bit of it listed out in  black and white, and possibly all of it at risk of being taken away when you file for bankruptcy. And the number one cause of personal bankruptcy in America is medical debt. Even among people with health insurance, this was a shocking statistic to me. When I first heard about it, one thing goes wrong and suddenly you're in a medical situation that could drown you in debt. I wanted to share a couple ways. I've seen people reduce or eliminate their medical debt and hopefully free up that burden on their family. 

Eligibility for these financial assistance programs varies with the size of the household annual income, etc. So it's important to ask about those guidelines where you will be receiving care or have received care. The amount of assistance you can expect may vary, but it is generally based on the Federal Poverty Level. For example, a household making up to 200 percent of the Federal Poverty Level may be entitled to free healthcare services, whereas a household making between 200 and 500 percent of the Federal Poverty Level may receive discounted healthcare services. To be considered for these kinds of programs, patients are often required to provide financial information for their household and provide supporting documentation. This could be things such as a current tax return, last two pay stubs, written documentation from income sources, or a copy of all bank statements from recent months. When it comes to working with the hospital to get your debt reduced or eliminated. I want to point out an absolutely amazing resource that can help you advocate for yourself. 

It's an organization called Dollar Four and they have helped people secure over 15 million dollars in medical debt relief. If you find yourself in a situation like this, reach out and see if you're a candidate for their program as well. The next step I want to talk about would be in the case where your medical bills have been sent into collections and a particular law called the Fair Debt Collection Practices Act comes into play here. This would be a case where maybe you weren't meeting the minimum requirements of paying towards a hospital payment plan for one reason or another and now the bill has been sent to a Collections Agency. 

This is where the Fair Debt Collection Practices Act outlines how agencies such as this must follow strict protocol in terms of when and how they contact you about your debt. First off, the collection agency must notify you that the bill is with them. 

Once they have initially contacted you to let you know this, they must now send a written letter within five days that shows your current debt. But this letter will also state that you can request to verify the debt within 30 days, which we'll get back to in a moment. If they don't send you that written letter within five days, then pause right there, send the Collections Agency a letter stating that they violated the Federal Debt Collection Practices Act and your rights have now been violated and the debt needs to be thrown out or removed because it's no longer valid, but say they do follow this procedure and send that letter what next. Well, in this case, you're going to do exactly what that letter says. You have the right to do and verify the debt. When a debt collector is asking you to pay money, you're entitled to ask for details. In this case specifically, you're going to request a letter of validation. What this does is it requires the Collections Agency to prove that you actually owe the debt and the amount that they're saying you do. 

You can easily find samples and templates of this letter online that you can use and your best bet is to send this via certified mail. It'll cost a little bit more, but it's worth it to have confirmation that they received it. Now. These letters can be pretty extensive in what they're asking for, but generally speaking, some of the information you can request might include the name and address of the original creditor, the amount and age of the debt including the last billing statement from the original creditor, and details about their authority to collect the debt. A great sample letter can be found on Consumer Finance. 

It has some background information as well as a sample letter that you can fill out and use. The two most important parts of this letter that they must prove are one that you agreed to pay this debt so that would require something with your signature on it saying that you agreed to this. 
And Number Two which is a big one. They need to have a HIPAA release form saying that they have the permission to access all the protected health data that you're requesting if they don't have permission to access all of this protected information. 

Then they have a much bigger problem on their hands. Once you send them this letter and are waiting to receive the documents that you've requested, they can't continue to try and collect the debt fast forward and say they are not able to produce all of these documents that prove that not only is it your debt, you agree to it and they have permission to access these protected documents. You're then going to send another letter via certified mail. 
Stating that they have failed to validate the debt and this is in violation of the Federal Debt Collection Practices Act and their options are to dismiss the debt or you'll bring this to the attention of the Federal Trade Commission. Now I know that these are a lot of steps and it sounds like a lot of work. But if you are facing a mountain of medical debt, taking the time to dedicate to this could pay off. In the end, and looking into the future, check out some of our videos on medical cost sharing and how that could help protect your family from surprise medical bills, wiping you out financially. Now if worst comes to worst and they are able to provide you with all of this documentation and prove that you do in fact owe this medical debt, the most important thing is to not ignore it and seek out competent legal advice if possible. 

Don't think that the debt collectors can't squeeze water from a rock and that you don't have anything for them to get. 

If you don't respond and have a default judgment taken against you, many states allow them to garnish your wages, keep you from renting or leasing, and can even prevent you from renewing your driver's license. You'd be much better off working with them to come up with a manageable payment plan that is a better option than default. There's a high likelihood that they bought the debt from a provider for pennies on the dollar and maybe willing to come up with a workable solution. I hope this information has been helpful 

Traditional Health Insurance - There is A Better Way