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Medical debt drains finances of many insured consumers

In Arkansas and throughout the country, hospitals are engaging in a scorched-earth policy of billing patients enormous amounts for tests and medical procedures. When the bills are submitted for payment to the health insurance carrier, the insurers are consistently rejecting a large number of them. The reasons for this burgeoning unpaid medical debt may be partially due to the large deductibles contained in many policies. In other instances, insurers are denying coverage by challenging the wording of coverage clauses and through other procedural technicalities that are generally unfair to defenseless policyholders.

The resulting picture is alarming, as hospitals dun consumers in a merciless manner, with judgments, garnishments and even sheriff's sales. The result is a crippling of the credit of many middle-class families. Their misfortune is due to a lack of sufficient legal protection against such predatory and anti-consumer practices. For innocent consumers, the experience can be life shattering and a second slap in the face to many who are just digging out of the deep hole of the recession.

Medical collections comprise 52 percent of all collection accounts on credit reports and are far more voluminous that any other reported debts. There are about 43 million consumers embattled by one or more medical collection accounts. Even though they bought health insurance in good faith, the huge bills are not being paid by insurers. These insured victims of the system are being denied mortgages and credit cards due to blemished credit records.

Considering all of the obstacles, the best answer for some consumers may be to file a personal consumer bankruptcy and restore a clean slate. If the medical debt is substantial, and if it is causing serious problems of financial survival, a personal bankruptcy will legally wipe out that debt quickly and permanently. The long-term problem of unbridled medical debt needs governmental attention and protective legislation. In the meantime, those residents of Arkansas with serious medical debt problems owe it to themselves to at least consult with a consumer bankruptcy attorney to learn the pros and cons of this remedy granted by federal law.

Source: Forbes, "Unaffordable Health Care: Financial Roulette", Richard Eisenberg, Nov. 17, 2015

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