Medical bills can be confusing and overwhelming. Many Americans struggle to pay their medical bills on time, or even at all But what actually happens if you don’t pay a hospital bill by the due date?
Consequences of Not Paying Medical Bills On Time
There are several potential consequences of not paying your medical bills on time:
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Late Fees and Interest Charges Hospitals doctors, and other medical providers will typically charge late fees and interest on overdue bills. This extra cost gets added to your balance making the bill even harder to pay off. Late fees are usually around $10-30 for the first month and interest can be 10% or higher.
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Credit Damage: If an account stays unpaid for 180+ days, the provider can report it to the credit bureaus as a delinquent debt. This dings your credit score, making it harder to qualify for loans, credit cards, rentals, etc. Medical debt is the #1 cause of bankruptcies in America.
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Debt Collection: Once it’s clear you aren’t going to pay voluntarily, the provider may sell the debt to a collection agency or sue you directly in small claims court. The collection agency will start calling you demanding payment. They can also report the unpaid debt to credit bureaus.
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Wage Garnishment: If a creditor sues you and wins the case, they can get a court order to garnish your wages. This means your employer automatically deducts a chunk of each paycheck (up to 25%) and sends it to pay the debt.
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Bank Levies: Creditors can seize money out of your bank accounts through a bank levy. They simply serve the bank with a garnishment order and the bank must freeze then hand over the money.
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Property Liens: Hospitals and other creditors can put a lien on your home and other valuable property. The lien gets paid off when you sell the asset. It also lowers your property value in the meantime.
Why Do People Not Pay Medical Bills On Time?
There are a few key reasons consumers fail to pay medical bills on time
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High Deductibles – More insurance plans now have deductibles of $1000+ that the policyholder must pay out-of-pocket before coverage kicks in. Many people can’t afford these upfront costs.
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Surprise Bills – You can get a nasty surprise bill even with insurance if you unknowingly see an out-of-network doctor. This leaves you stuck with the huge balance.
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Confusing Bills – Billing errors and overcharges are common. Disputing charges is tedious. People who don’t understand their bills often avoid dealing with them.
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Financial Hardship – Medical issues often coincide with loss of work and income. Even a middle-class household can be overwhelmed by an unexpected crisis.
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Lack of Payment Plans – Hospitals aren’t always flexible on allowing reasonable payment plans for patients struggling with costs. Long delays in sending bills also cause payment issues.
What To Do If You Can’t Pay Hospital Bills On Time
If you’re having trouble paying a medical bill by the due date, take action quickly:
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Call the billing office and ask for an extended due date or payment plan. Explain your financial situation politely.
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Submit an application for charity care or financial assistance with the hospital. Non-profit hospitals are required to provide discounts or fee waivers to low income uninsured/underinsured patients.
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If you have insurance, start an appeal process challenging any charges you believe are wrongly billed or too high. The insurance company must review your appeal.
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Contact the doctor’s office or hospital billing department to review your account and double check for any billing errors or overcharges. Dispute anything incorrect.
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Seek help from non-profit medical bill counseling services that provide advice and negotiate bills down for free.
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If collectors get involved, know your rights under federal and state law. Don’t hastily agree to pay without confirming it’s a legitimate debt.
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Ask for medical bills to be removed from your credit reports if they are paid off or settled for less. Also request deletion if there were any billing disputes.
The Bottom Line
The consequences of not paying medical bills on time can be severe, including credit damage, aggressive collections, wage/bank garnishment, and legal judgments. It’s crucial to address medical bills quickly and not ignore them. Seek financial assistance programs, payment plans, billing advocates, and legal protections to help negotiate medical debt and avoid further issues down the road. With the right resources and advocacy, medical bills don’t need to be financially devastating.
How does medical debt impact my credit score?
Owed medical debt can be reported to credit bureaus one year after you first miss a payment. Medical debt can lower your credit score, which can hurt your ability to get loans. Unpaid medical debt stays on your credit report for seven years.
In 2022, a voluntary policy was announced by the three major credit bureaus (Equifax, Experian, and TransUnion) to prevent some medical debt from being listed on your credit report and factored into your credit score:
- Paid medical bills should no longer be included on credit reports.
- Unpaid medical bills cannot be listed until the bill has not been paid for at least 12 months.
- Medical bills for $500 or less should no longer be included on credit reports.
If your credit report contains any these forms of medical debt, follow these instructions to dispute any errors.
If you feel your rights are being violated, seek help from the Consumer Financial Protection Board:
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What Happens If You Don’t Pay Medical Bills?
FAQ
What are the consequences of unpaid medical bills?
Medical debt can also make people avoid medical care, which can lead to physical and mental health problems and bad financial outcomes such as lawsuits, wage and bank account garnishment, home liens, and bankruptcy.
Do unpaid medical bills affect your credit?
As long as your debt remains with your provider, it’s not reported to credit bureaus. After several months of non-payment, however, they may sell your debt to a collections agency. Unpaid medical debt in collections can be reported to credit bureaus after one year.
What happens if I ignore medical bills?
Ignoring Medical Bills Creates Problems: Credit Score Damage, Debt Collectors, Lawsuits. Explore Solutions: Payment Plans, Financial Aid, & Potential Personal Injury Claim.
What is the law on unpaid medical bills in Texas?
Under Texas laws, the statute of limitations on medical bills debts is 4 years. This means that your healthcare provider can’t sue you to get your unpaid bills if they don’t start a lawsuit within 4 years.
What happens if you don’t pay medical bills?
You can click or swipe to find out what can happen if you don’t pay your medical bill on time or at all before you give up on it. Medical bills that aren’t paid… If the hospital billing department says they’ll send your account to collections, pay attention.
Are You late paying your medical bills?
Most Americans who have had trouble paying their medical bills (61% of those surveyed) say they have been late on a payment. People who work for the Kaiser Family Foundation and the New York Times say that the medical bills they’ve had trouble paying are ones that have been building up over time, like for treatment for a long-term illness. (Kaiser Family Foundation/New York Times).
Why are so many people not paying medical bills?
In the U. S. , many people are not paying their medical bills because they can’t afford them. According to data from the U. S. Census Bureau, 19% of American households could not afford to pay for medical care they received right away. Households with children are more likely than those without children to have unpaid medical bills.
What happens if a medical bill is unpaid?
They have to send you a debt validation notice within 5 days of calling, writing, or otherwise getting in touch with you about an unpaid medical bill. This letter should say: You have 30 days from the date you received this notice to either dispute the debt or ask for more information.
What happens if a medical bill is overdue?
If you don’t pay your medical bill on time and it goes into collections, you may be contacted by a debt collector. Sometimes, you will receive a final warning to pay before the debt goes to collections. Explore these related articles, suggested for readers like you. A debt collector’s job is to get a balance paid in full.
How can I avoid paying a medical bill if I don’t pay?
1. Check your EOB and bill for errors. If you get a medical bill in the mail, don’t think that the amount written on it is the amount you need to pay. Billing and coding mistakes happen a lot. If you know how to spot these mistakes, you can avoid paying extra than you need to.
