B. Grant McNutt

Many Americans are concerned about the high cost of care if we get seriously ill with COVID-19. According to the Centers for Disease Control and Prevention (CDC), the median hospital stay for a COVID-19 survivor who is admitted is from 10-13 days. That is a big bill, even for many with insurance. For the uninsured or those with very high deductible plans, the debt could be crippling.

The Alabama Department of Insurance is currently working with health insurance issuers to provide relief for those insured and directly affected by the COVID-19 pandemic by waiving certain costs and 100% coverage to those Alabamians with medical costs from COVID-19. Visit their website https://www.aldoi.gov for specific details on how health insurance issuers in Alabama are helping to reduce out of pocket costs for those insured. Keep in mind though that these programs are only for those insured by these specific health insurance providers.

For those uninsured, if you face hospital medical expenses from COVID-19 and the hospital takes money for your medical expense via the CARES Act Provider Relief Fund, the hospital must agree to not come after you for the difference in what it was paid by the government and the costs to provide you coverage. To put this a different way, if the hospital that treated you attempts to be paid for your expenses by the federal government, it cannot come after you for the difference that you owe after the government pays it. The key is whether the hospital will seek to be paid by the government via the CARES Act Provider Relief Fund for the costs of treating you… if not, you are on the hook for the balance. 

Local Medical Debt Statistics

But it turns out that COVID-19 is not only the medical debt concern facing people who may be in difficult financial circumstances–or whose finances have gone from bad to worse. A great many Americans were saddled with past-due medical debt long before the pandemic hit. That includes 16% of Alabama households, 19% of households in Mississippi and 22% in Tennessee.

In Montgomery, Alabama, one local hospital, Jackson Hospital, sued over 1,000 people in 2019 with some lawsuits for as little as $150. In some cases, those being sued by Jackson were not even aware that any money was owed to Jackson Hospital until the Montgomery County Sheriff served them with a lawsuit at their doorstep.

The U.S. currently has measures in place to temporarily protect against eviction through December 31, 2020, but there are no protections against most other collection efforts. Some, like wage garnishments and orders attached to bank accounts, take time to wind their way through the system. That means for some, those orders are taking effect at the worst possible time, as many Americans are facing unemployment, a reduction in work hours, and increased expenses. If a credit card company, medical provider or other creditor has a judgment and has attached your bank account, the bank may be legally obligated to seize those funds and transfer them to the creditor. Likewise, employers who receive wage garnishments may be legally obligated to garnish up to 25% of your paycheck. ProPublica has reported horror stories from people in multiple states who have seen their wages garnished or money debited from their bank accounts since the pandemic started.

Managing Collection Efforts during the Pandemic

Debt collection has been a serious burden for many who have been out of work in the past 6 months and those issues may get worse as creditors, collection agencies and courts get back to business as usual. If debt collection is interfering with your ability to stabilize your finances during these difficult times, or you have an outstanding judgment or other debts that could damage your financial foundation, educating yourself is the best first step. 

Bond & Botes Helps People Struggling with Debt

The first step toward finding the right solution for you is to talk with an experienced bankruptcy lawyer. You can begin gathering information right now by scheduling a free consultation with one of the experienced bankruptcy attorneys at Bond & Botes. We can answer all of your questions regarding Chapter 7 Bankruptcy, Chapter 13 Bankruptcy, stopping a foreclosure or wage garnishment, avoiding liens, stopping lawsuits, discharging medical debt, personal loans, payday loans, credit card debt, etc. We can alleviate your stress! We want to help and we can help you! 


Bond, Botes, Sykstus, Tanner & McNutt, P.C.

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