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How the difficulties of the uninsured may quickly compound

Both insured and uninsured patients in South Carolina may be taken aback by a joint media report whose recent publication raised to the surface of public consciousness a practice regularly used yet underemphasized by many of the country's nonprofit hospitals. Despite the fact that these institutions receive their definitive tax exemptions as an incentive to take on uninsured patients who lack the means to obtain treatment at standard hospitals, several nonprofit hospitals often endorse civil action, in the form of debt collection lawsuits, when these uninsured patients default on hospital bills related to treatment.

In most cases, uninsured patients are charged more for a given medical service than are insurance companies, which possess the power and position to negotiate discounts for treatment of their policyholders, according to authorities. This, in effect, creates the dynamic of inflated prices for a segment of the population least equipped to cope with it. Nevertheless, the nonprofit hospitals may and reportedly do enlist debt collectors to retrieve outstanding debt after these uninsured patients default on their hospital bills' due payments.

After some time, debt collectors may file suit against the debtors as a means to ensure and expedite collection in full. Authorities indicated that most of these debtors, uninsured patients who had proved themselves to be financially incapable of covering their hospital bill payments let alone medical debt, do not stir much surprise when they appear at the civil proceedings without legal representation.

Consequently, the court receives little reason not to rule in favor of the debt collectors, who thereby obtain the authority to utilize wage garnishments as a tool to siphon up to, in most states, 25 percent of the debtor's after-tax pay.

This tool serves to reduce a debt to obsolescence in a relatively rapid way and, as a corollary, to expedite the descent to rock bottom for uninsured patients foundering in the quicksand of medical debt. For many in that dire position, the most plausible escape route requires filing bankruptcy, which, guided by an insightful and well-prepared bankruptcy lawyer, may produce a lengthy though practical roadmap to solvency.

Source: The Huffington Post, "How Nonprofit Hospitals Are Seizing Patients' Wages", Paul Kiel and Chris Arnold, December 19, 2014

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