Big medical bills need not ruin your finances
Diane Witusik survived a battle with throat cancer but the mountain of more than $80,000 in medical bills took a different casualty: her house.
FORT LAUDERDALE, Fla. - Diane Witusik survived a battle with throat cancer but the mountain of more than $80,000 in medical bills took a different casualty: her house.
Diagnosed in 2007, Witusik had surgery, chemotherapy and radiation. She had health insurance but soon had to change to her employer's COBRA plan, which cost so much she had to drop it. With no income, Witusik said she fell behind on her mortgage and lost her Fort Lauderdale home to foreclosure in April 2008.
"It was like a big failure," said Witusik, who is still ailing and rents rooms from a friend. "Getting sick was the end of life as I knew it."
It doesn't have to end that way.
A new consumer guide aimed at uninsured and underinsured people says patients who know how to work the system can sometimes delay payments and score enough discounts to avoid calamity, even with overwhelming debt.
"People in this situation need to know what their rights are and what steps to take first to deal with the problem," said Ron Pollack, executive director of the advocacy group Families USA, which put out the guide.
The guide follows a study last spring that found 62 percent of U.S. bankruptcies were caused by or stemmed from a major illness. And Families USA found that 41 percent of workers struggled to pay medical bills in 2007 - more since the recession.
The biggest mistake made by people with huge medical debt is not asking for help, said Cheryl Boucher, a billing executive at the tax-assisted Memorial Healthcare System in Hollywood, Fla.
"Anyone who is willing to work with us and share their information can probably qualify for a discount of some sort, if they are uninsured. Some people don't even ask," Boucher said. Some don't know about the help, some won't admit they need it.
Memorial may write off as much as two-thirds of its charges for low-income uninsured people, smaller amounts for others, Boucher said. Other South Florida hospitals have similar programs.
Cheryl Fish-Parcham, lead author of the consumer guide, said people also err by putting medical bills on credit cards with steep interest charges. Here are tips from the guide (www.familiesusa.org or 202-628-3030):
- Double-check the bill for errors, duplicate entries and charges for unknown services. Also, make sure the insurer paid its fair share. If not, file an appeal with the insurer.
- See if you qualify for federal-state Medicaid, for low-income and disabled people.
- Negotiate with hospitals, doctors and others, many of whom offer discounts. Ask for a payment plan; seek one with no interest and that does not make the entire bill come due if you miss a payment.
- Pay high-priority bills first, such as taxes and child support. Then mortgage and rent. Avoid paying medical bills with credit cards or a second mortgage; that puts your house at risk.
- Bankruptcy is a last resort; it can disrupt your credit for up to 10 years. Even if a creditor sends a bill to collection, sues or garnishees your wages, avoid it. Creditors may not even pursue those with little income or assets.
- Know your rights. The law bars creditors from threatening, limits debt collector calls and shields some income from garnishment. Consult Legal Aid or the state attorney general.
(c) 2009, Sun Sentinel.
Distributed by McClatchy-Tribune Information Services.