Clark Howard: How to know if your medical debt is eligible for forgiveness

DAYTON — Over 50 percent of all debt sitting with third-party collection agencies is medical debt.

Consumer Advisor Clark Howard said in many cases that debt could have been forgiven by the provider. He explains why millions of people are still on the hook for it.

It’s because of something you may not know about. It’s called Charity Care. It’s required by law of nonprofit hospitals, and you wouldn’t believe how likely you are to qualify for it if you need it.

Rene Coker is a breast cancer patient. She said, “I knew that I had cancer in December. That’s when I got my diagnosis and my breast cancer is triple negative.”

Her diagnosis is more than a physical burden, like millions of others, it’s also a financial burden.

“And you can see where I paid with a $100 bill that I got from Christmas,” Coker said.

The single mom of a young adult son works for an answering service. “I make $14 an hour,” she said.

Even after insurance, Coker faces tens of thousands of medical bills. She said her stepmother, Katie Coker, became her advocate for financial assistance.

“She was just amazing in starting the ball rolling because I just couldn’t think about finances,” Coker said.

After speaking with one provider, Katie was shocked to learn just how much Rene qualified for.

“She qualifies for aid. And, I said, well, how much? Because I thought maybe it was a graduating scale. She said 100%. I could have cried,” Katie said.

Rene said, “It’s an enormous blessing. And without that, I would be homeless or die from my cancer.”

Jared Walker founded the nonprofit Dollar For. The organization helps consumers apply for charity care at hospitals.

“People need an advocate in times like this where it’s like I’m sick. I’m overwhelmed. I don’t have the money, who’s going to help?” Walker said. “There is a federal law that requires nonprofit hospitals to have charity care.”

Program requirements vary by hospital and state.

“We’ve created this database where we wanted to put it all in one place, Walker said.

Users enter their income, medical costs, and hospital and Dollar For let’s know if they qualify. Since 2019 Dollar For has helped get $44 million in medical debt forgiven.

“The average policy will waive your medical bills if you’re at 200% to 250% of the federal poverty guidelines,” Walker said.

Patients have 240 days from the start of treatment to apply. And, one year before medical bills can be sent to collections.

One of the biggest mistakes that people make – “Ignoring it altogether. That happens a lot. It’s overwhelming. People get the letters, and they file in the trash, or they put them in the bin or the drawer where everything disappears,” Walker said.

Avoid applying for a medical credit card or charging up your existing cards. Once you do that, you no longer qualify for charity care. Rene said being persistent is key to getting financial relief.

“Don’t be afraid. Don’t be afraid to ask,” Rene said.

Even if you don’t qualify for full forgiveness, you may qualify for partial forgiveness on a sliding scale. If you don’t qualify for that then negotiate. See how much of a reduction you can get in your bill and ask a lot of questions.

©2024 Cox Media Group