We all know that, in general, medical costs will increase as we get older and begin to suffer from the many illnesses that are synonymous with old age. Therefore, it might reasonably be expected that medical bill debt-collection rates would also grow as the population ages. Recent research from FICO, however, has shown that, in fact, this does not appear to be the case. Credit bureau data from last year showed the rate of medical-collection reporting peaking with 27-year-olds, with a uniformly high rate of consumers aged between 24 and 46. More than 25 percent of consumers in this age bracket have a minimum of one medical bill debt collection appearing on their report, yet after the age of 46, the rate slowly drops.
Health Insurance Coverage at The Heart of The Problem
One of the greatest problems that results in high rates of medical bill debt collection is that a significant number of people in the 26-to-46-year-old age bracket have no health insurance at all, and those who do, face the dual problem of increasing treatment costs and higher deductibles. It is no wonder then that medical-bill debt collections are currently the top cause of bankruptcy in the United States, especially since unlike other leading causes of debt, such as credit cards and auto loans, medical expenses generally come out of the blue, causing an unexpected financial crisis.
Lack of Consolidated Billing Services a Major Issue
One further significant factor that drives medical bill debt collection is that the processes of billing for treatments and also for reporting bills that remain outstanding to the bureaus tend to be confusing and opaque. Multiple contributors add to the confusion. There is a lack of standard practice across the healthcare industry. It is also a fact that many consumers are obliged to pay their entire treatment bill while the coverage is being dealt with by their insurance provider. Therefore, it is easy to see why patients are struggling to develop a coordinated approach to paying their medical bills.
Advantages to Debtors for Making Regular Payments
People who owe money to their healthcare organization can benefit from putting in place a regular payment plan. FICO is now overlooking paid medical-bill debt collections, and, therefore, those who have a plan in place to pay off their debt will see an improvement in their credit score. The flip side of this, of course, is that healthcare providers need to make this a possibility for patients who find themselves in debt after receiving a treatment that they are struggling to pay for.
The Importance of a Flexible Healthcare Payment Processing Solution
Both healthcare providers and patients benefit from paying off their outstanding medical bills. The organizations improve their cash flow and relieve the problem of bad debt, and patients enjoy a higher credit score and also the peace of mind that comes with a stable financial plan. Therefore, it benefits healthcare providers to adopt a flexible healthcare payment processing solution that will offer patients a broader spectrum of options with respect to the manner of payment and the types of payment accepted. By allowing patients the freedom to choose their preferred payment method, whether it is a credit card or ACH payment, and the ability to pay online or over the telephone at any time of the day or night, healthcare providers are playing their part in facilitating convenience. By offering the ability to set up a payment plan to cover a larger balance payoff, organizations will certainly see higher success rates in their medical bill debt collection.