Overcoming Medical Debt After an Accident
Fighting for Financial Stability After Recovering from Life-Changing Injuries
Medical debt is the leading cause of bankruptcy in the United States. Over half of debt collection in this country is for medical bills. Why is medical debt so destructive here? Part of it is the cost of healthcare—1 in 6 dollars is spent on healthcare. The other problem is that insurance companies and hospitals essentially set their own prices on medical procedures, putting people in precarious financial situations for virtually no reason. For example, what room a patient is rolled into after surgery could mean a difference of thousands of dollars. When people are in terrible accidents, they need resources to keep them financially stable. That's why we wrote this guide.
By the end of this article, you'll know what obstacles you're facing and how to protect yourself from long-term loss.
How Medical Debt Destroys Families
The cheerleading coach had wanted to try a new stunt.
Never mind that the girls were on a hard surface. Never mind that the girls had never even attempted a stunt like it together. Never mind that none of them had the experience with each other to know how to keep each other safe. The flyer (the cheerleader who stands at the top of the stunt) only remembers that she told herself to stay steady. What she remembered next was looking up at her teammates from the ground.
In a CNN story about the danger of high school athletics, stories about serious injuries and their long-term effects highlighted one of the most harrowing truths of the 21st century: getting seriously hurt can haunt you for the rest of your life—even long after the injury is healed. This article is about more than life-changing injuries—it's about how people can end up paying far more for other people's mistakes than they think. This article is about medical debt: how it happens, how to avoid it, and what you can do to get rid of it.
Why Catastrophic Injuries Are Called "Catastrophic"
The word "catastrophe" comes from the word for "sudden change."
There's still truth in that definition. A catastrophic injury isn't just a bad break or a painful accident—it's an injury that changes everything. Physically, mentally, emotionally, and financially, our lives are never the same after a catastrophic injury. The cheerleader mentioned above, Brittany Noffke, changed forever after hitting the ground.
See, she had bruised her brain. The concussion was severe, but the physical symptoms healed within months. However, the mental and emotional strain of the injury dug a financial pit for her family, which triggered a domino effect that burdened them for years.
In the end, her injury resulted in:
- Long-term anxiety
- Her mother's unemployment
- Moving cities
- Mounting medical bills
This sequence of events is tragic, but it's unfortunately common. Half of all debt collection in the United States is for medical debt. A catastrophic injury is not only physically catastrophic—injuries that require extensive care are financially devastating too. When someone gets into a bad car accident or slips and falls at work, they're at risk for decades of financial instability, even if their injury heals.
Medical debt doesn't just happen to the uninsured. Stable, financially well-off families are just as at-risk—60 percent of people with medical debt are insured. One study found that 80 percent of people who filed for bankruptcy due to medical debt were insured when they got hurt. Ultimately, medical debt is simply the gap between insurance coverage and enormous treatment costs—and insurance covers less than you think.
How Physical Injuries Become Financial Ruin
In the United States, the average hospital stay costs $15,734. That's only the average. Catastrophic injuries are far more costly. For example, the average burn victim's hospital stay could balloon into ten times that much.
With initial treatment costing hundreds of thousands of dollars, it's easy to see why catastrophic injury victims fall into medical debt so quickly. To avoid having their debt sent to collections, some patients will pay for care on their credit cards—unfortunately, a short-term solution like that results in thousands of dollars in interest fees.
A major part of the problem is the long-term mental and emotional impact of catastrophic injuries. Serious brain injuries, for instance, create personality shifts and memory issues that make having a job nearly impossible for most people. Permanent physical injuries, like a spinal cord injury, create practical and emotional obstacles that make earning a stable income difficult.
The addition of medical debt compounds the problem. Studies show that having medical debt contributed to patients eating less food or leaving their AC off to manage their debt. Alarmingly, 63 percent of adults with medical debt avoided further treatment due to owing the hospital money.
Avoiding treatment would only compound the physical issues that gave rise to their financial burdens, creating a vicious circle. Unpaid medical debt eventually goes to collections, affecting a patient's credit and ability to borrow, further limiting their options.
It's a cycle we've seen time and time again.
Insurance Companies & Healthcare Providers Charge What They Want
Why is medical debt such an issue in the United States? If it's the same procedure in Lubbock as it is in Houston, why are they priced differently? How does a hospital stay financially ruin a hard-working, financially-stable provider? Part of the problem is that hospitals and insurers are charging you in whatever way they want—not necessarily in a way that makes sense. The Balance, a money management advice website, puts it this way:
"...medical service providers have pricing structures that vary so much, they are nearly random. If you're being charged $1,200 for a few bandages, you can argue with them about it. The medical industry counts on you not understanding what you are being billed for and they use it against you."
The nature of your medical bill can be fairly arbitrary. Imagine you've just had the exact same surgery as another patient, and the nurses wheel you both into different rooms to recover. If one of you is wheeled into the ICU and the other is wheeled into the recovery room, your bills will differ by thousands of dollars, despite getting the same care at the same facility.
How to Quickly Get Rid of Medical Debt
- Pay medical bills directly to your provider—it's usually interest-free (unlike a credit card), and medical debt usually earns more sympathy than consumer debt.
- Have your insurer send medical bills to you before they confirm payment to the hospital—billing errors are common, and you need to stay on your toes.
- Get as much money for your treatment as you can from your insurer—transportation costs, home equipment, etc.
- Declare bankruptcy—while a solution of last resort, bankruptcy discharges most (if not all) of your medical debt. However, it comes at a steep price.
Medical costs differ by geographic location too. In San Mateo, CA, a C-section is around $48,000. In Fresno, only a few hours away, a C-section is $13,000. If you happen to get hurt in a car accident between two hospitals, your ambulance driver may inadvertently turn your life upside down depending on the hospital you go to.
Finally, it's your insurer who determines how much you'll end up paying for care. Insurance providers negotiate fees with healthcare providers, with the largest companies getting the best rates. This isn't a difference in how much you pay, by the way—this is a difference in how much the hospital bills the insurance company. If you have Insurer A, spine surgery might cost $100,000. For Insurer B, the hospital might bill them up to twice that much for the exact same procedure.
"How Much Is My Case Worth?"
I Can't Afford to Lose Everything—What Can I Do?
There's an alternative to declaring bankruptcy or going without food to pay your medical bills.
For more than a decade, Arnold & Itkin has helped the victims of negligence—car accidents, work accidents, premises liability injuries, and more—get what they needed for medical care. We've cleared their debts and helped them get enough put away to pay for treatment for the rest of their lives. No avoiding the doctor. No more collectors calling. No more shame with every ER visit. In total, we've secured billions of dollars for people burdened by costs they shouldn't have to pay.
If you were hurt through no fault of your own, call us. You can review your options for free with one of our attorneys. If we can help you, we'll cover the cost of your case from start to finish, connect you with the medical specialists you need, and handle any insurance disputes on your behalf. Meanwhile, we'll hold whoever caused your accident accountable—helping to replace your income and provide for your family.
Don't worry about fighting for every penny from your adjuster—we'll take care of that. You focus on healing.
Call (888) 493-1629 or contact us online today. We're here to help you figure out what to do next.