What You Need to Know About Medical Debt in the US

What You Need to Know About Medical Debt in the US

Whether you are a medical provider or part of a collections team, it is always good to be knowledgeable about medical debt in the US. The success of both business aspects rely on the influx of patients as well as revenue. Ideally, all patients would have insurance or immediately pay their balance in full. However, this is rarely the case and has led to massive debt across the US. Here are a few things you should know to better understand the patient and processes needed to collect payment.

Uninsured Patients
Not surprisingly, uninsured patients have the hardest time paying back medical debt. In fact, as many as 53% of uninsured Americans have problems paying back their medical bills. People remain uninsured for many reasons including affordability, loss of job or simply because they didn’t think they needed it. Another issue is that a large portion of the uninsured are elderly or disabled. Due to this, they have limited sources of income and generally let medical bills take a backseat to other seemingly more pressing bills.

The Most Difficult Bill
Any kind of unexpected bill can cause financial strain. As many as 45% of Americans said that a medical bill of just $500 would be difficult or impossible to cover, according to Bankrate. Another 20% said they would apply the bill to a credit card which clears them of the medical debt, but adds to their credit debt. Other than using credit, Americans are burning through their savings to cover medical costs. Whether it be a long-term savings account or borrowing against their 401k, unexpected medical bills are putting millions of people in a crunch.

Empathy in Billing and Collections
With all of these facts and figures on medical debt, it’s no wonder that there is a need for understanding from medical providers and collection teams. Being knowledgeable about how and why people accrue medical debt allows the billing and collections process to run smoothly. Empathy and understanding gives you the upper hand in talking to the debtor. Keep the phone call brief and calmly outline the debt you are collecting on. Depending on the debt amount, suggest a payment that day as well as schedule a payment plan for the future in order to collect the full amount.

Medical debt is more than just an individual issue, it is a nationwide problem. Understanding how and why someone accrues medical debt will allow you to be empathetic to their problem. By having a plan upfront and using your knowledge of debt, you can simplify the process and obtain payment.