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Model act aims to help those with overwhelming medical expenses

A serious illness or injury can strike anyone in Texas without warning. When this happens, a person may need treatment in a hospital along with ongoing care even after they are released from the hospital. This is when the bills start rolling in. From the ambulance ride, to the radiology and lab tests, to the surgical procedures to the anesthesia, having a serious injury or illness can take its toll not only physically, but also financially.

Unfortunately, even those who have health insurance can find themselves unable to cope with their medical bills. A person may have a high deductible to meet, certain procedures may be excluded from coverage or they could have unknowingly been treated by a physician that was out-of-network. All of this can lead to medical expenses that are simply too much to cope with.

In fact, the Consumer Financial Protection Bureau reports that 20 percent of individuals in the United States have medical debt that is in collections, affecting their credit score. In fact, overall over 50 percent of items being shown on credit reports in the United States are medical expenses. In an effort to collect on these unpaid bills, collection agencies may frequently call the debtor demanding that they pay what they owe, a person's wages could be garnished or a lien could even be filed on the debtor's home.

The federal Affordable Care Act addressed medical debt. States in the nation had the option to expand Medicaid. Those who did in general saw a decline of 40 percent in medical debt. In addition, the ACA had requirements that lead to fairer debt collection actions, and increased the availability of financial assistance for those treated in nonprofit hospitals.

The National Consumer Law Center has a model act that aims to build on what the ACA has done. It would determine what the baseline will be for those who are eligible for financial assistance, and it would make it so that both non-profit and for-profit medical care facilities offered financial assistance. It also would establish standards that would be applicable to all health care providers regarding how debt can be collected.

Time will tell if any states adopt this model act. In the meantime, those who are facing overwhelming medical debt may want to consider filing for Chapter 7 bankruptcy. Doing so can extinguish medical debt in many cases, allowing a person to move forward with a clean financial slate.

Source: statnews.com, "Medical debt is crushing many Americans. States can help fix that," Jenifer Bosco and John O'Brien, Oct. 30, 2017

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