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Debtors Owing Hospital Bills Have Some Legal Protections

Posted on in Bankruptcy

In today's economy, many people are facing massive debts, many of which are medical bills. As recently reported in a Chicago Tribune article, some studies estimate that up to half of all reported collections are made up of medical debts. Unexpected health issues, illness, and catastrophic injuries all can result in large hospital bills that people who lack comprehensive hospital insurance simply cannot afford to pay.

Fortunately, the Affordable Care Act (ACA) contains certain provisions that prohibit hospitals from taking certain collection actions against people who are having difficulties paying their hospital bills. If hospitals violate these rules, they risk losing their federal tax exemptions. For instance, hospitals must not take extreme collections actions against patients before screening them to determine whether they qualify for financial assistance. Likewise, hospitals must limit the fees charged to patients eligible for financial assistance to Medicare rates or lowest amounts paid by insured patients.

Nonetheless, some hospitals have failed to follow these ACA requirements. In some cases, hospitals have turned over accounts to collections belonging to patients who were eligible for free or reduced-cost care, who then have proceeded to sue the patients in an attempt to collect the debts. Some patients allegedly have even been contacted by debt collectors while still hospitalized.

Although hospitals must comply with ACA rules, people with overwhelming medical and hospital debts may other forms of legal recourse, as well. Bankruptcy may be an option, either under Chapter 7, which allows for the liquidation of eligible debts, or under Chapter 13, which sets up a repayment plan of some or all of debts over time. An experienced Lake County bankruptcy attorney can evaluate your situation and help you decide the best option for handling your hospital debts. Contact our office today, and find out whether bankruptcy is right for you and your family.

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