Unpaid medical bills are a concern for the insured and uninsured; over half of all medical-debt-related bankruptcies involved people with insurance, reports BCS Alliance. Several laws exist to restrict debt-collection practices and protect medical privacy.

The Facts

Unpaid medical debt is treated like any other debt; it has to be paid back. However, debt collection agencies must follow any state laws and the Fair Debt Collection Practices Act, according to the Federal Trade Commission (FTC).

Considerations

The Health Insurance Portability and Accountability Act (HIPAA) also applies to unpaid medical debts. HIPAA limits the amount of information that health-care providers can give to debt collectors to the "minimum necessary" amount, which is left up to the provider to decide, reports Privacy Rights.

Misconceptions

Many consumers often pay off medical bills they are not legally accountable for, called balance billing, reports Business Work. In this practice, the health care provider will bill a patient directly for whatever their insurance does not cover. Balance billing is illegal in most states and federal law.

The Facts

Debt collectors can sue for unpaid medical bills and garnish wages.; however, they cannot harass a person, such as calling after 9 p.m. or making violent threats, reports the FTC.

Prevention/Solution

The BCS Alliance claims that people can resolve their unpaid medical debt by declaring Chapter 7 bankruptcy, but this should be a last resort. Those on a limited income can often protect benefits such as Social Security in a court case.

Source:

Federal Trade Commission

Privacy Rights

Business Week

Resource:

BCS Alliance