Incomes Growing Faster than Debt in US
According to the Consumer Financial Protection Bureau, millions of Americans have medical collections listed on their credit reports each year. This is because, unfortunately, many people find it difficult to pay their medical bills. To make matters worse, nonprofit hospitals attempt to garnish the wages of those who cannot pay – a drastic action that extends beyond simply reporting the owed bills to the credit bureaus and involves going to court.
This practice is widely used in a few states throughout the United States. Missouri is home to a hospital that has sued more patients than any other. However, that nonprofit hospital was also found to own a for-profit collection agency, which has filed thousands of lawsuits against patients of the hospital. Not surprisingly, many of those patients had low incomes, making wage garnishment devastating.
Intended Role of Nonprofit Hospitals
With the Affordable Care Act, certain requirements were placed on nonprofit hospitals so that they could maintain federal tax exemption. Those things included transparent financial assistance, billing, and collection policies. The ACA also placed a limit on how much hospitals can charge patients who are eligible for financial assistance. Additionally, hospitals are prohibited from attempting to get collections before determining a patient’s eligibility for financial assistance.
Although hospitals must determine the details of eligibility and assistance within their policies, they must also publicize them to the community as well. In the case of the Missouri hospital, low income patients weren’t informed of the financial assistance option and didn’t receive reduced prices for their medical care. Unfortunately, at that hospital, after a patient’s bills are sent to collections, he or she is no longer eligible for financial assistance, which leads to wage garnishment.
It’s fair to question whether the hospital made sufficient efforts to determine these eligibilities. The IRS must first issue final regulations to determine whether reasonable efforts were made. Generally, however, the average person might find it reasonable if the hospital had brochures available or signs on the walls that detailed such information.
How to Avoid Legal Action for Medical Bills
Patients at nonprofit hospitals, regardless of whether they have insurance, must be proactive and ask for any information on financial assistance or potential charity care policies. They should also never automatically assume they are ineligible for such benefits and should communicate directly with hospital administration to resolve any outstanding medical bills.
Additionally, although it is not a strict requirement, other healthcare providers also have financial assistance policies for individuals with lower incomes. Generally, if a patient doesn’t inquire about such things, they won’t get to take advantage of them. Sadly, in some cases, if medical bills aren’t paid, the individual may be sued in court, which could mean a risk for wage garnishment and irreparable credit damage.
If wage garnishment is a real threat as a result of past due medical bills, you should waste no time in acquiring an Illinois debt relief attorney. Heather Benveniste with Benveniste Law Offices can negotiate your debt with creditors to help resolve the issue on the most favorable terms to you. Contact us today for a free case evaluation.
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