TAMPA BAY, Fla. — Medical debt plagues millions of Americans, including one in three families in the Tampa Bay area.
Health policy experts say medical debt shatters the lives of patients and their families. It’s the cause of more than half of all bankruptcies and has even forced some critically ill local patients to choose between paying for life-saving medications and death.
Related: Medical debt is a big problem; One in three Tampa area families affected
“It’s a terrible mess,” said Dr. Jay Wolfson, a public health professor at the University of South Florida. “It’s probably the single force following the illness and treatment that causes families to lose their homes.”
‘You do what you have to do’
The fight for her life cost Alicia Laddon her life savings.
Laddon’s three-year battle against stage 4 breast cancer forced her to take out a second mortgage on her home and max out credit cards to pay for the cancer drugs that keep her alive.
A two-week supply of a single prescription costs her $732.56.
“You do what you have to do to get the drugs, which basically you use a pharmacy that takes credit cards,” said Laddon.
Laddon said the financial stress will play a role in whether she tries another treatment or gives up the fight.
“When this treatment stops working that will be it for me,” said Laddon.
Medical debt can ruin and derail your life
Others with medical debt say it doesn’t take tens of thousands of dollars in doctor bills to ruin your credit and derail your life.
“My medical bills in collections totaled over $5,700,” said Jamie Fox, a single mom of three.
Fox said the bill racked up during a series of illnesses and hospitalizations kept her from buying a home or car for her family.
“I was denied because of the amount of medical debt I had in collections,” said Fox.
How does the debt collection industry work?
Experts estimate Americans owe $1 trillion in medical debt and buying that debt has become big business.
Here’s how it works: Hospitals and medical providers sell old debt to professional bill collectors for just pennies on the dollar.
Then, those bill collectors go after every dollar the patients owe – not what they paid. And they use any means they can to collect – threatening phone calls and letters and in some cases, lawsuits.
You can negotiate down your debt
Emanuel Rivero, a debt counselor for the nonprofit Money Management International, says you can negotiate medical debt.
“Make contact with them,” said Rivero. “We cannot be afraid to reach out to these collectors.”
Rivero said debt collectors will often accept offers of a third or less of the bill owed.
The statute of limitations to collect on a debt is five years, but it can still remain on credit reports for up to seven years.
That means patients with older debt have better bargaining power to clear up that debt – as long as they have the cash to pay.
“You need to be prepared to make the payment that day,” said Rivero.
But Rivero also cautions that patients should always demand written confirmation of what the debt collector is willing to settle for before paying the bill.
We’re taking action for you
ABC Action News is using its own money to pay off $1.6 million in medical debt for people in the Tampa Bay area.
Letters have been mailed to local residents from our nonprofit partner RIP Medical Debt, which like the collectors, buys debt for pennies on the dollar.
But instead of collecting on that debt, the organization cancels it.
ABC Action News donated $12,500 to RIP Medical Debt -- which helped us buy old medical debt in the Tampa Bay area and wipe it out.
“There might have been some people owing $60,000 or $70,000 who have no possible way of paying it,” said Craig Antico, chairman of the board for RIP Medical Debt. “Even a bad mark on your credit report that is $100 dollars can reduce your credit rating by like 30 to 100 points.”
What happens if you get a yellow envelope?
If you receive a yellow envelope with “RIP Medical Debt” on it, there will be a letter inside telling you how much debt ABC Action News was able to pay off for you.
You won't have to pay that debt to anyone – ever. Remember, that debt payoff is only for that bill and doesn't include any future debt. Also, you won’t have to pay taxes on this gift.
Due to medical privacy, ABC Action News does not know who is receiving these letters.
But if you do get a letter, we want to hear from you. Your story could help inspire others to give and pay off more medical debt for those in need in our area.
Our partners at RIP Medical Debut have set up a donation fund to specifically eliminate more medical debt for the people of the Tampa Bay area. You can help local folks struggling to pay medical bills in collections here.