Financial Assistance & Debt Crisis Intervention

A Greater Understanding

Table of Contents

Be Creative!

Thank you for contacting the Patient Advocate Foundation and choosing to learn more about methods to manage your financial situation during a medical crisis.   As a national, non-profit organization, our objective is to provide guidance to patients who are attempting to navigate through their financial problems and to provide information about opportunities for financial assistance that are available locally, regionally, and nationally.

This publication will provide some general tips to help you maintain your financial stability during difficult financial times associated with your health.  

We encourage you to be creative in your approach in how to utilize this assistance. For example, you may need financial assistance to pay your health insurance premium, but come across an organization that can provide assistance for your utility bill.  Taking advantage of the financial assistance for the utility bill may allow you to use the saved money in that area of your budget to pay your health insurance premium.

 

In addition to the specific negotiating strategies listed below, we suggest  you search for charity resources that offer assistance to those dealing with a medical issue  by using the National Financial Resource Directory located at www.patientadvocate.org/financial.  The My Resource Search mobile app can also help you search for resources that help the uninsured and underinsured patient, and is available for both Android and Apple devices.   Both these tools will provide a narrowed list of resources that match your scenario and who offer support to patients in need. 

Strategies for Resolving Your Debt Resulting from Illness

These expert tips have been compiled from our professional case managers who work with patients every day to resolve medical debt issues.

Look for ways to reduce your expenses

When confronting any financial situation that squeezes your normal budget, the first thing you should consider is how you can reduce your monthly expenses.  Focusing on removing or reducing spending areas that are not critical to sustaining your household, temporarily or long-term can help relieve financial pressure.   These may involve seeking alternate sources for entertainment, activities, transportation, or by seeking new brands for some of your daily supplies.

Do you have outstanding medical bills?

If  you currently owe your medical providers for services you have received, it is best to proactively reach out to the billing offices and ask to make payment arrangements that you can afford.  Staying in communication with your provider in regards to your bills and alerting them to your situation will reduce your chances of being immediately referred to a collection agency that will negatively impact your credit rating.  If you cannot establish reasonable payment arrangements, inquire if your provider has programs for Charity Care or financial assistance that you may apply for.

 Do you need healthcare but you do not have health insurance?

Ask your provider of care if they have Charity Care or financial assistance programs that can reduce costs for those with financial constraints.   Locate a community free-clinic or reduced-cost in your area, as  these facilities work to provide care to uninsured patients in need, despite their ability to pay.  

You will also want to seek out options for securing comprehensive health insurance.   Check your eligibility for government health programs including Medicare, Medicaid and local government insurance programs.  Purchasing commercial insurance through your state’s marketplace during open enrollment allows you to check your eligibility for financial assistance on premiums and out-of-pocket costs while comparing and contrasting various plans in your area.   You can enroll in an insurance plan offered by your employer, directly with an insurance company or by using an insurance broker. 

Do you need medication? Are you uninsured without prescription coverage?

Speak to your doctor about any concerns you have in regards to being able to afford the medications you need.  Your doctor will determine whether generic medications are an option for you, or if there are alternative medications that can reduce costs.   In addition, ask your doctor if the office can provide some samples of the medications you need.

There are a few online resources including www.needymeds.org and www.pparx.org  that maintain a list of medication assistance programs available by the manufacturer and national organizations.  Cross referencing the medications you are prescribed with these lists can help you find available copayment programs, free-drug programs or discount coupons associated with your medication.  In addition, reaching out to the manufacturer through the website specific to your medication will link to any patient assistance programs offered by the drug company.

You can also see if your state operates a discount prescription drug program.  These are found by searching on the internet for prescription drug assistance in your state.

Are you eligible for disability through your employer?

If you are not sure if you are eligible or qualify for short-term or long-term disability insurance, speak to your human resources department at your workplace.   These programs help by providing money that serves as wage replacement during the period of time that you must miss work due to an injury or severe medical condition.   If you live in California, Hawaii, New Jersey, New York, Rhode Island or Puerto Rico, you may also be eligible for state disability benefits coordinated through your employer.

Short-Term or Long-Term Disability programs help bring income into your family during the time that you are out of work due to an illness.

You may be eligible for COBRA at work for continuation of your group health insurance policy.  To protect yourself from increased medical debt you should make every effort to maintain health coverage through COBRA or by securing alternate coverage through individual insurance or governmental programs.

 

Be advised that the Affordable Care Act allows for special enrollment periods in your state or federally-run health insurance marketplace under certain circumstances.  If you should lose your health coverage through your employer through termination or seperation from your job you are able to select new coverage within this special enrollment period.   This is true in the scenario where your COBRA coverage ends as well.  If you secure coverage through your state’s marketplace, you may benefit from premium tax credits and other cost reductions.  However, if you do not enroll within 60 days of loosing coverage, you will need to wait until the next open enrollment to purchase insurance through the Marketplace.

If you are unable to return to work once your short-term disability or long-term disability  has ended due to medical conditions, you should apply for federal Social Security Disability Insurance (SSDI) to provide some income and help you gain eligibility for future healthcare options and programs. 

Have you been told you cannot return to work by  a doctor ?

If so, you should apply for federal assistance through Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) concurrently with Medicaid. Once you apply for SSDI or SSI, there is generally a waiting period before you receive your benefits.

Contact the Social Security Administration online or visit a local office to determine what benefits you would qualify for and the length of your waiting period.

If you have been disabled for 29 months and receiving SSDI benefits, you will qualify for Medicare.  Additional information can be found at www.medicare.gov

If you currently receive your health insurance benefits through your workplace, you will want to investigate your options for continuing coverage or securing new coverage outside of your employer’s plan.   The employer’s human resources department will be able to alert you to any pending changes to your health insurance based on your inability to return to work.

 

Dealing with your household expenses while balancing a medical crisis.


Do you need food?

Seek out community resources that may be available to help residents with their food needs.  These include utilizing a food bank, seeking help from area churches or community groups that provide food assistance and low cost meals, or discounted food box purchase programs.   In addition, check your availability for state and federal assistance programs including the Supplemental Nutrition Assistance Program (SNAP), the Women, infant and Children’s (WIC) Program, or The Emergency Food Assistance Program (TEFAP).

Do you need help with your utilities?

Each state has a Low Income Home Energy Assistance Program (LIHEAP) that is geared to help residents of that state.   Additionally, ask your utility company if they have any charity programs available for their customers experiencing financial and medical issues.  

Call the Department of Social Services in your area to see if they have any information about a Community Action Agency, an organization who can usually assist when faced with a shut-off or eviction notice.  Seek out other community organizations in your area, including the Red Cross, The Salvation Army and the United Way as they frequently have information on local programs to help residents with emergency utility assistance.

Ask your doctor to write a letter of medical necessity to the utility company, as they may be more willing to grant you a medical baseline allowance if a full-time household resident has a medical condition.  Lastly, you may contact the State Utilities Commissioner to request their review of a compassionate appeal.


Secured Debt vs.
Unsecured Debt


Secured debt includes loans that tied to an asset – house, car, property-- giving the lender the right to take the asset if you fall behind on payments.

Unsecured Debt is all other debt where the lender cannot repossess any assets – like credit cards, student loans, personal loans, debt to companies for services.   When you fall behind, lenders have the right to take legal action against you or place your debt in collections.

Do you rent?

Look for means to lower your monthly rent payments.  Options include applying for Section 8 Housing (voucher/ certificate that helps you to pay your rent), Public Housing, or consider moving to smaller or less expensive residence.

Do you own your home? Or have a mortgage?

Call the bank or mortgage holder early and try to work out payment arrangements if you have fallen behind.  Your best option for this type of debt would be to work directly with the creditor and ask for alternative payment arrangements for the loan, such as refinancing, deferring payments, or paying only the interest due.

A home mortgage is usually at risk of foreclosure after three months of delinquency. Typically, mortgage lenders are more cooperative when they are approached before a mortgage reaches foreclosure.  Inquire about any programs offered by your bank or the federal government that can help consumers with home debt who may be at risk of default, including hardship programs, loan modification or short-sale.  

If you cannot get the creditor to work with you, you may need to consider selling the property.  

If you have significant equity in your home, you may consider taking a second mortgage, a reverse mortgage, refinancing for lower payments or establishing an equity line of credit.   It is important to speak with a financial advisor  in these scenarios to ensure you will be able to remain current with any additional obligations.

In general, most organizations will not provide financial assistance for secured debt, such as a mortgage or an automobile loan, since these loans are tied to an asset giving the lender the right to take the asset if you fall behind on payments.  

Do you have credit card debt?

Contact the creditor to make payment arrangements, offering to pay a minimal payment that you can afford. Be specific and honest in the amount you agree to pay.  You may want to inquire if they are willing to accept a reduced total as a settlement if you can pay the balance off promptly. 

You may also reach out to any of the nonprofit consumer credit counseling services, like Consumer Credit Counseling Services or the National Foundation for Credit Counseling, as they can help negotiate reasonable payment options with your credit card companies, consolidate debt into one payment, and help you maintain your credit  while in repayment.

Do you have life insurance policies with equity?

There are organization that loan money to policy holders as an advance against your  whole-life policies.  Programs like this will reduce the payout amount at the time of death. Term-life policies cannot be used for this purpose.

Search for resources NOW in the National Financial Resource Directory

To generate a list of the potential organizations that may have programs to address your needs, its as easy as selecting criteria that matches your scenario. There is no limit to the number of different searches you can perform, so start now.

This financially focused tool helps sort resources for a broad range of needs including housing, utilities, food, transportation to medical treatment, home health care, medical devices, and pharmaceutical agents.

This tool can also be accessed in the App store for Apple devices here  or for Android devices in the Google Play store here.