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Medical Debt

Q&A: For estate executors, unpaid medical bills can be daunting

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Dear Liz: My wife is in the process of being named executor for her late sister’s estate. There are several medical bills, including some that have been sold to collection agencies. Our understanding is that any negotiations or settlements should be done with those agencies as opposed to the original medical organization. Is this correct in general as well as in probate situations?

Answer: If a bill has been sold to a collection agency, that’s the entity your wife will have to contact. However, not all medical bills are sold. Sometimes collection agencies work on behalf of healthcare providers. When that’s the case, your wife may want to contact the original provider.

As executor, your wife can and should hire an attorney to advise her on administering her sister’s estate. The estate will pay the cost for this advice and your wife will receive helpful, personalized counsel on dealing with every aspect of being an executor, including this one, which is particularly fraught.

The Consumer Financial Protection Bureau recently warned that some medical debt collectors are violating federal law by inflating bills, trying to collect on debts that aren’t owed, demanding payment for services insurance has already covered and lying about consumers’ rights to contest bills. The attorney can help your wife verify the bills are accurate and negotiate settlements.

Q&A: A health crisis brings high medical bills. Here are tips for dealing with the costs

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Dear Liz: I have been diagnosed with Stage 4 cancer which has metastasized into at least two areas. Surgery, chemo, perhaps a stay in rehab and possibly radiation therapy will be prescribed by my oncologist. In order not to deplete my retirement savings (the oncologist estimates that I will live longer — years — if the treatment goes well), what resources can be identified to help financially with co-pay, medical and prescription costs? I already know about hospital benevolence programs. I am going to revert to my monthly “austerity” budget, watching every penny of my expenditures and trying to avoid or reduce them. I will be unable to work part time, as I have been doing, for at least this year. I am 70. I have Medicare and a Medicare supplement plan as well as a Part D prescription plan. Thank you for any suggestions.

Answer: You’ve just received a shocking diagnosis and it’s understandable that you’re worried about the costs you’ll face.

Your Medicare supplement plan — also known as a Medigap plan — is designed to cover some or all of the costs not paid by traditional Medicare, including co-payments, co-insurance and deductibles. The plans with lower premiums typically have skimpier coverage. You’ll want to carefully review your plan to see what coverage you have.

You probably will have questions, so consider connecting with your State Health Insurance Assistance Program. This program can refer you to a government-funded counselor who can provide free Medicare counseling. You can find your regional SHIP using the online locator or by calling (877) 839-2675 and say “Medicare” when prompted.

Ask your oncologist about lower-cost treatment options and any charitable programs they have or are aware of. Benefits.gov can show you what government programs might be available to help with costs, while 211.org can help you check if there are any local programs. You may be able to seek out cheaper prescriptions through online pharmacies, GoodRx, NeedyMeds, manufacturer discount programs or Medicare’s Extra Help program, which helps Medicare recipients with limited means to afford their medications.

Another option for people with catastrophic medical bills is to file for bankruptcy. Your retirement accounts would be protected, but you’d want to discuss your options with a bankruptcy attorney long before you file.

While you’re researching, keep in mind that the U.S. medical system is set up to push treatment, often regardless of the cost, efficacy or toll on quality of life. Physician and certified financial planner Carolyn McClanahan warns that people can find themselves on a “medical treadmill” that continues pushing painful, debilitating and costly treatments with little or no real benefit to the patient.

Consider having a frank talk with your oncologist about how much more time each treatment will likely get you — not just in a best-case scenario, but in an average-case scenario — and how you are likely to feel during the treatment. A second opinion may also be a good idea. These discussions can help you decide if you want to pour all your available resources into paying for treatment or if there are other options that would allow you to better enjoy whatever time remains.

McClanahan recommends picking up a copy of Katy Butler’s excellent book, “The Art of Dying Well: A Practical Guide to a Good End of Life.” Despite its title, the book doesn’t just focus on the very end of life, but also provides essential information about how to best navigate the healthcare system as an older person.

Q&A: Here’s why you shouldn’t put that huge hospital bill on a credit card

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Dear Liz: Because of COVID, my 27-year-old son lost his job and health insurance. He was unable to afford continued health insurance and did not qualify for Medicaid. He contracted spinal meningitis and was hospitalized 12 days. The hospital reduced his bill to $28,000 from the original $80,000, but he is still unable to pay. He remains unemployed and without any savings. What would you suggest he do?

Answer: Your son should first call the hospital and ask about applying for financial assistance. Federal law requires nonprofit hospitals to offer this help to low-income patients, and many for-profit hospitals also offer programs that can reduce or even eliminate the charges.

He also should ask about a payment plan geared to what’s left of his income. He should resist any hospital pressure to put the bill on a credit card, because hospital payment plans typically don’t charge interest while credit cards do.

If he’s still left with a bill he can’t pay, he should consult a bankruptcy attorney, and do so as soon as possible. Bankruptcy experts are predicting a big uptick in filings as people and businesses struggle with fallout from the pandemic.

Q&A: Finding a way out from under big medical bills

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Dear Liz: I am so lost. I recently became a widow at 52. My husband didn’t have life insurance. I had to grab a job two weeks after he passed. Five months later, I’m sick with late-stage congestive heart failure and can’t work. I’m barely able to pay my mortgage now with Social Security survivor benefits. I need to sell and rent something cheaper before I lose my home of 18 years. I have to decide between continuing to make the payments and buying medicine and food.

I don’t have health insurance because Medicaid was not expanded in my state and I haven’t been on disability long enough to qualify for Medicare. I owe a lot of money to someone who helped me. I would have been dead without the help, not to mention homeless. My husband left me in a bind.

Answer: I’m so sorry you’re having to deal with all this.

If you’re not already getting help paying for your prescriptions, check out resources such as NeedyMeds.org, the Partnership for Prescription Assistance and the Patient Advocate Foundation’s National Financial Resource Directory. It’s crucial with your diagnosis that you take your medications as prescribed and don’t skip or alter your dosages.

Your medical providers may have charity programs to help pay your healthcare bills, or they might be willing to accept small payments. You may be able to negotiate a discount if you ask to be charged the same rates as your area’s largest insurer.

If you’re on Social Security Disability Insurance, you’ll qualify for Medicare after two years. Without health insurance, though, it may be hard to get the quality care you need to live that long.

You could move to another state that would cover you under Medicaid, but that may not be feasible, given how sick you are. Plus, you may not qualify if you have some equity in your home and you sell it. While your residence is not a countable asset that could prevent you from getting Medicaid, the profits from a sale probably would be.

A housing counselor could help you explore your options, which could include selling, taking on a roommate or getting a mortgage modification. You can get referrals from the U.S. Department of Housing and Urban Development site or by calling (800) 569-4287.

Another option is foreclosure, especially if you don’t have much equity in your home and the foreclosure process is relatively slow in your state. You could use the money that otherwise would go to house payments for living expenses and medicine until you have to move. It’s not ideal, but none of your options are at this point.