Consolidating medical debt?

[ak_powder_monkey]

So I find myself in a situation where I have a considerable amount of medical debt to about 10 different doctors/hospitals/imaging centers etc, plus some credit card debt from the amount of work I missed last year due to injury. Hopefully at some point in the near future I will have a much better job and be better able to pay for all of this (sigh). So right now I'm making small token payments on all of these debts just to keep them from going to collections, but making absolutely no headway, and its a total pain in the ass to pay all these different bills.

Has anybody been able to a) save money and b) make their lives easier by consolidating all their debt, paying off the hospitals then making like one monthly payment? Is it worth it? Any advice?

P.S. don't skimp on health care... A split second can derail your entire life because you did (especially if your entire life is fishing/skiing).

[GoldMember]

I'd throw this into the Padded Room. Likely to get better/more responses.

[NW_SKIER]

I did a quick read through this and it seems to have some good information. Especially the parts related to your credit score when consolidating. Good luck.

http://www.needhelppayingbills.com/h...ical_debt.html

[shroom]

I believe medical is one of the few debts where negotiation is really plausible. call the hospitals and tell them what you can pay and either settle or set up a better payment plan. unless.. you've already done that.

[LightRanger]

I believe medical is one of the few debts where negotiation is really plausible. call the hospitals and tell them what you can pay and either settle or set up a better payment plan. unless.. you've already done that.

That, plus have you looked into hardship paperwork/charity? Many hospitals have foundations that underwrite the hospital taking writeoffs on lower-income patients. That may be against your personal code, but then, the United States medical system is borderline immoral. [/polyass]

Have any assets you can borrow against? You'll get a lower rate by doing that...

[char]

As has been said, talk to the hospitals, they usually have a case officer that can help work something out. My sister was able to have a big chunk of a medical bill forgiven after showing that she wasn't going to be able to pay it.

[old goat]

It would be a pretty hard-hearted doctor or hospital that would charge interest. Consolidation means adding interest payments to your debt and is almost never a good idea except if you have a high interest credit card debt and can consolidate at a lower rate, but check the fine print carefully--the lower rate will likely be a teaser rate and if you don't pay the debt off in time you could get hammered when the rate goes up.
Young friend of mine broke his collar bone and had to have it plated. Can't work for months (painter), has a toddler and a wife who works. Doc did the procedure at a surgery center instead of a hospital and gave him a very good deal on his fee--saved him a ton of money. There are decent medical folks out there--even orthopods. The guy could have gotten insurance for him, his wife, and his baby for $200 and change, under Obamacare--a great deal except he doesn't have $200 at the end of the month. When are the people with power going to wake up to what life is like for most people? Don't answer--I already know.

[powtario]

I forget what exactly I read, by Google enough and it will appear.

Basically this lady got ripped of by hospitals, she negotiated it down, and then said fuck it I'll do it for as a job for other people too. Time Magazine had an excellent article last year about health care expenses, and how the bill for uninsured can easily be twice what they would charge an insurance company.

[Chugach001]

Part of my day job is restructuring corporate debts and inevitably helping entrepreneurs restructure theirs, which often involves personal debts. I've not dealt with medical debts specifically but it doesn't sound that much different and should be quite malleable. PM me, if you're willing to take charge of the situation. I know all the tricks.

PS, consolidating debt accomplishes close to nothing and wraps the noose tighter around your neck. You're playing with interest and terms, not the principal. The key is cutting the principal 50% or more and then worrying about terms and fair interest. Unaffordable debt should be eliminated, not managed.

[ak_powder_monkey]

thanks for the advice...

I guess its just a PITA paying super low amounts on many bills... And I'm worried about credit scores and such (wanting to make a very large purchase in the near future), I don't want one to slip through the cracks.

[powtario]

Found it, read the whole thing, page 11-12 are the bill negotiators

http://www.uta.edu/faculty/story/231...ndAndGreed.pdf

[creaky fossil]

That, plus have you looked into hardship paperwork/charity? Many hospitals have foundations that underwrite the hospital taking writeoffs on lower-income patients.

ese es verdad

hospital admins know their services are priced on assumptions regarding 3d party payer funding, they know their services couldn't be priced that way if people didn't have 3d party payers

[LightRanger]

^^^ True. But at least some do offer hardship/foundation/charity write-offs. I had a really severe accident six years ago and ended up with several thousand in OOP contributions that I had no way to pay at the time. Some I was able to put on a CareCredit account and make the minimums, and then paid it off fully when I was able. Some I was actually able to get written off by applying through a hospital program. My sense is that not a lot of people knew it existed and/or with the affluent location of the hospital not a lot of people qualified. No idea.

[creaky fossil]

that's what I was saying, that's why they have charity/debt forgiveness programs, but o-care may destroy those pockets of flexibility since it's expected to put everyone into the 3d party payer category -- at least thematically, that's what its backers pretend will happen, and if they convince the public "everyone's insured now" then there's no reason to have charity/forgiveness programs

[LightRanger]

Ahh. Interesting. I didn't know it was going to have that effect. Or, at least, hadn't thought about it much. So somebody with a "bronze" plan that has a several thousand dollar OOP max wouldn't be able to take advantage of a program that no longer exists. But where do the subsidies fit in? Maybe there's a subset of folks that make too much to qualify for subsidies, but due to some issue can't afford the OOP?

[creaky fossil]

subsidy distinct from forgiveness/charity program. example, one of Msla's 2 chop shops is affiliated with RC Church, I believe their charity program is funded by the church coffers at least in part. I know in the past it was because I've used it, and was told it was church money/policy that forgave via charity. other chop shops might get fed/state funding for E-care walk-ins who are uninsured, etc. what I do know is o-care is designed to put everyone into 3d party payer, either a tiered o-care participant carrier/entity or medicare/medicaid. the thrust is to not work cost containment, but instead, to admit costs are absurd but fund the payment of them regardless. it's one of o-care's biggest flaws. but really it's not o-care's flaw as much as it is a system flaw that o-care simply didn't work to address. might have a wee bit to do with the fact that med care and affiliated businesses are one of the few profit sectors in the US economy.

[EaglesPDX]

Depending on the size of the debt, declaring bankruptcy is an option. Medical costs are the leading cause of personal bankruptcy in the US so it is not that uncommon to see on credit reports. Assuming the "large purchase" in future is real estate, once cleared of the medical debt, you can likely save for that and spend 2 years re-establishing your credit.

Make sure you are stable regarding car and housing prior to declaring bankruptcy so you can spend the two years saving and building credit score. You don't want to go car loan or apartment shopping right after declaring bankruptcy.

As early as 1-2 years after bankruptcy you may be able to receive a home loan. The Federal Housing Administration (FHA) and Department of Veteran Affairs (VA) have specific guidelines for accepting borrowers who have filed for bankruptcy. For example, the FHA will insure mortgages to individuals who have filed Chapter 7 liquidation bankruptcy two years after the discharge if "the borrower has reestablished good credit (or has chosen not to incur new credit obligations), and has demonstrated an ability to manage financial affairs."

[creaky fossil]

these days BK lacks the cultural / finance entity stigma it held 20 yrs ago, used to be BK = forget loans for a LONG time, and count on peer disgust.

[El Chupacabra]

OTOH, lenders know that a post-discharge borrower cannot seek another BK discharge for 7 years (IIRC), so any new unsecured debt is safe from that perspective. However, don't expect great interest rates.

[EaglesPDX]

OTOH, lenders know that a post-discharge borrower cannot seek another BK discharge for 7 years (IIRC), so any new unsecured debt is safe from that perspective. However, don't expect great interest rates.

Also without the medical debt, more income to pay home mortgage along with bigger down payment from saving money vs. paying medical bills to two years prior to getting a mortgage.

And declaring bankruptcy due to medical debt is viewed differently than making bad financial decisions and declaring bankruptcy. The debts discharged would be medical vs. financial.

[Chugach001]

Read the book "Bad Paper" to understand the world of consumer debt collections. Don't even consider bk without a real smart plan and the advice of professionals. There are formulas to figuring out the utility of it.

[old goat]

ese es verdad

hospital admins know their services are priced on assumptions regarding 3d party payer funding, they know their services couldn't be priced that way if people didn't have 3d party payers

Yes and no. The book rate for hospital services--what hospitals charge patients paying out of pocket--is usually higher--often many times higher--than the discounted rates the hospital negotiates with insurance companies. But as we have said hospitals are often willing to negotiate if they realize they have no chance of collecting the full amount, especially if they sense impending bankruptcy and not collecting anything.

BTW--the best financial advice I ever got was from my 5th grade PE teacher (an ex Washington General--the guys who played against the Globetrotters) who told the class to never buy a car on credit but to always pay cash. Advice that has always worked well for me (going to medical school helped my finances as well.) Nowadays I wonder whether that advice should be extended to borrowing money to pay for college. Going into serious debt because of illness or education isn't a concern in the civilized world, which the US of course is not part of.