Millions of people make monthly payments for health insurance policies, but unexpected expenses or reduced income can make payments unmanageable.
Health insurers typically provide a month-long grace period. If payments aren’t made within this timeframe, your coverage could be terminated and coverage denied.
Healthcare debt relief professionals can assist in negotiating lower monthly payments.
1. Your Coverage Will Be Terminated
If you fall behind on paying your premiums, your health insurance provider could terminate your coverage. Once 31 days late are reached, a notification will be sent out with instructions on how to settle any outstanding balances in order to avoid termination of coverage and avoid being terminated early. It is therefore imperative that monthly premium payments are made promptly.
If your insurer terminates your coverage, open enrollment or special enrollment periods must be used to regain coverage. At that point, it will be important that your income has changed enough so as to qualify for different subsidies or cost sharing reductions (CSR) plans in order to cover premium costs associated with your new health insurance plan.
As well, any medical services received while without health insurance must also be covered by you; this is especially the case if they came from out-of-network providers; hospitals often charge uninsured patients two to four times more than health insurers and public programs like Medicare for treatment provided, according to Kaiser Family Foundation (KFF).
After searching for and purchasing new coverage, you may discover surprise medical bills – charges from out-of-network providers that your health insurance company did not approve or authorize. Your health insurer must provide an Explanation of Benefits (EOB) or medical records with details of any denied claims; if you believe they were denied unjustly, filing an appeal with them should be easy as the instructions should be listed on either your EOB or insurance card will provide guidance.
Depending on your income and how long it has been since you last had health coverage, an uninsured penalty may apply if your coverage is canceled and you remain uninsured unless an eligible life event occurs during which special enrollment periods open up again. Penalties vary based on income; as well as, how long ago health insurance was last in force.
2. You’ll Have to Pay Out-of-Pocket Costs
Out-of-pocket costs associated with health insurance must also be met by patients; these include deductibles, copayments and coinsurance premiums. It’s crucial that these expenses are paid on time so as to maintain coverage.
If you are having difficulty paying your health insurance premium, it is best to reach out to your provider immediately. They may provide payment plans or other solutions that will allow you to maintain coverage; otherwise it is likely that coverage will be cancelled.
When you receive a medical bill, take time to carefully review it. Check that all charges reflect what services were rendered; errors often arise during transmission and payment processing processes.
Compare medical bills against an EOB (Explanation of Benefits). An EOB provides a summary of care that you receive after receiving treatment, detailing what amount your health insurance is billed, how much will be covered by their policy, and any outstanding balance due.
If your medical bill seems inaccurate, call your provider and request to speak with their patient advocate. They can explain the billing process and help you to resolve it. Negotiating with healthcare providers if the total bill amount is out of your budget might also help – many will offer payment plans because they would rather receive payments over time rather than nothing at all.
Adults often struggle to pay their medical bills on time. Medical debt collection in America now surpasses both credit card and auto debt collection combined! If you find yourself struggling, reach out to the provider and request to speak to their customer service representative; they can explain the billing process and offer solutions such as payment plans or even waiving the fee altogether.
3. Your Credit Score Will Be Damaged
Your credit score is an integral component of financial wellbeing, and when debt payments are late or missed altogether they can have serious repercussions for your score. Lenders or collection agencies usually report any type of late debt payment including medical bills as a delinquency to credit reports which then causes credit scores to decrease as a result.
Medical debt differs in its effects on your credit in comparison with other debt types in that most healthcare providers wait at least 90 days before selling the outstanding balance to a collection agency, allowing time for negotiations over payment arrangements or plans with providers and insurers before your bill goes to collections.
Once medical debts go into collections, they can remain on your credit reports for up to seven years after becoming delinquent, which can severely harm your scores and hamper loan approvals or home purchases. Once paid off by either yourself or an insurance provider, credit reporting agencies will remove these debts from their reports, no longer affecting them as much.
If you have a large amount of medical debt, one option might be taking out a personal loan or using a credit card with an extended 0% APR introductory period to help pay off that debt faster. But as interest will only add more debt quickly, this should only be done as a last resort as interest on it can quickly add up and lead to even further burdensome costs.
Millions of Americans struggle with medical debt, which can be an immense source of anxiety and worry. According to The Kaiser Family Foundation, those dealing with this type of debt often find it difficult to pay other bills, use up savings, and may even declare bankruptcy as a result.
Beginning in 2022, three nationwide credit reporting companies took steps to alleviate consumer’s anxiety over medical debt by removing it from consumer reports as paid debt and recently settled collection accounts that are less than one year old from these reports. They recognize that medical debt often stems from emergencies or one-time events and should not reflect an individual’s overall creditworthiness.
4. You’ll Have to Pay a Penalty
If you go without health insurance for an extended period, except under rare circumstances where the individual mandate penalty has been waived, you will likely face a penalty fee or penalty, which will ultimately determine which comes first: either penalty or premium cost.
If you enroll in a qualified health plan (QHP) through the marketplace, your insurer will notify you of your payment due date and the marketplace website allows you to track it. Failure to make full payments by this date could constitute “dropping out”; otherwise it would be considered nonpayment and you could become considered “dropout”.
Some providers will work with you if they see that you have the means to pay. They would often prefer being paid in installments rather than being left without payment altogether, and may offer discounted fees comparable to what Medicare or Medicaid cover for that service.
Another option would be to shop around for more affordable policies during open enrollment, which may require making adjustments to your budget or selling off unwanted items in order to raise enough funds. It may prove worth your while if you’re currently struggling to afford your current premium.
Insurance may deny your claim if they believe the service you received wasn’t medically necessary; this can be an obstacle in accessing care for many patients. If this happens to you, ask your physician to submit a letter of medical necessity on your behalf; alternatively speak with an insurance representative regarding what steps they recommend taking next.
Medical debt is a huge problem for millions of Americans, forcing many to stop spending on essential items, drain savings and borrow from family or friends in order to pay the bills. One way to prevent medical debt from building up is taking proactive measures to make sure you have adequate coverage, with premium payments made timely and accordingly.