First, here’s a practical (and important) financial article by Liz Pulliam Weston, titled Why Medical Debts Shouldn’t Count. Read it to find out about a vastly under-reported issue that is affecting thousands of lives: the recent, widespread selling of medical debt to collection agencies, often for pennies on the dollar. To add insult to injury, much of the time this debt is under $100 to begin with. Furthermore, these debts may be sold to debt collectors by medical offices who were not paid because the office made an error in billing. There is apparently no obligation to report anything to you prior to having your medical debt (which you might not even have known about) turned over to collections. For as little as a $7 outstanding medical bill, as the article notes, you could find yourself in a position where your “otherwise pristine credit was sabotaged by a medical collection.” The take-home message is to 1) write or email your representative to get all debt under $100 not reportable to collection agencies, and, in the meantime, 2) to carefully follow-up and complete the entire billing process for a medical event–even if you’re insured, even if the discrepancy is their fault, and even if the amount seems relatively trivial. I’d like to add a Doc Gurley perspective, which is that any doctor who sells your medical debt without first responsibly notifying you, or because of their own billing error, should be reported to your state medical board. While inappropriate selling of medical debt is not yet an offense, this type of behavior is unethical and, if enough people step forward to complain, a relatively aggressive Medical Board might feel compelled to take a stand on it. Personally, like Ms. Weston, I also don’t think medical debt of any kind should be reportable. Studies have shown medical debts to be a factor in 75% of bankruptcies in this country. Besides bankrupting people, are we now going to take a step further and destroy the credit of those who don’t pay fast enough to suit someone? Furthermore, I think medical providers should be legally required to offer you (and any other patient) the same pennies on the dollar debt purchasing option–if a debt collector can get that deal, why can’t you? I’ll bet if that was the requirement for medical debt-selling to continue, when push came to shove, no one would want to sell medical debts any more.
Second, a Pennsylvania health insurer, Highmark, and Visa, the credit card company, have teamed up (sounds like the start of a bad bar joke, doesn’t it?). Highmark has entered the gift card market with a new healthcare gift card for the holiday season. Their justification is that the card is aimed at people who want to give money to someone and know it will be used for health-related purposes. I’m trying to figure this one out. Sounds kind of like a present you inflict on someone you don’t really trust. So are we all buying these gift cards for the homeless, is that the target market? If so, I’d love to see the ad when it comes out–I’m voting for Johnny Depp as the homeless gift
These are wild and wacky days on the personal finance front when it comes to healthcare. As Sarge said at the end of roll call on Hill Street Blues, “Let’s be careful out there, folks.”