CHRONIC ILLNESS AND NEVER-ENDING BILLS

Heather looks on the bright side while dealing with chronic illness and medical debt—the No. 1 credit score killer

MEDICAL DEBT IS DAMAGING the credit of around 30 million people, according to the latest figures I’ve seen. You would expect damaged credit from medical bills to be a problem for the uninsured. But the untold story here is that people with insurance get their credit trashed because of both billing mix-ups and high debt-to-income ratios.

I spoke with Heather Christians of Kasson, Minnesota, who has seen firsthand how medical bills can compromise your financial future. Heather is a working mom who manages a chronic disease while serving as the primary breadwinner of her household right now.

Heather, forty-two, was diagnosed with scleroderma eleven years ago. It is an autoimmune disease in which, she tells me, “you turn to stone from the inside out” because of a hardening of connective tissue.

There is no known cure for scleroderma, but Heather doesn’t let that get her down.

“I am forty-two years young [and] continue to work full-time with the support of my husband and son,” she tells me. “I may have scleroderma, but I refuse to let it have me.”

Heather has a position as a victim advocate on the county level in Minnesota.

“In a nutshell, my job is to advocate for a crime victim from the law enforcement interview stage all the way up through the sentencing process and beyond and help make sure their rights are protected and their voice is heard,” she says.

“I have never hidden my disease from my coworkers and am so fortunate that I can do my job. Some days are tougher than others, particularly when the temperature doesn’t even reach zero during the winter! I have a few accommodations, like a handicap parking sticker and the ability to remote in if I really have to. I work eight to five basically, but I also carry our on-call phone about eight weekends a year and one or two nights every couple of weeks.”

Heather’s husband, Eric, thirty-seven, lost his job about three years ago and now works at a local pizza place on evenings and weekends while going to school to complete a degree in elementary education. Together they have a nine-year-old named Ethan whom they adopted from Guatemala when he was only five months old.

When I spoke to Heather, she had just received a letter in the mail from her medical provider telling her that her balance is now due in full or she will be turned over to a collection agency.

“I laughed—because otherwise I will cry—and told my husband that I have a payment plan with them, and have for years, and I faithfully make my payment every month. But here comes their yearly letter telling me I will be turned over to a collection agency because I can’t afford to pay in one large payment the costs of maintaining a chronic disease that I did absolutely nothing to bring on.”

In addition, her debt level makes her an undesirable risk for lenders, as she found out recently when her car was totaled in a parking lot.

“We tried to be wise about what we purchased and look at what we could afford in conjunction with the insurance payout,” Heather says. “Well, as you can imagine, we had to act quickly, and had about two weeks to make a decision. When we finally landed on one we were going to purchase, we were turned down by at least two banks but finally had one approve us; however, it was at a higher interest rate due to our debt.”

In another example of how her financial outlook has been harmed by medical debt, Heather and Eric were practically rebuffed by their credit union when they tried to consolidate $29,000 in various lines of credit with high interest rates into one payment with a lower interest rate.

“The loan officer kept saying how she stuck her neck out for us to get approved and that with our debt it was not easy.”

In order to do the consolidation, the credit union wanted to cancel two of their credit cards; charge them a fee to manage timely payments to the couple’s creditors; force them into a secured credit card with a $500 limit; hold Eric’s beat-up old car as collateral; and put them through mandatory budget counseling.

All for a consolidation that Heather estimates would have saved them $15 a month and actually extend their debt another two years versus the self-imposed budget plan they were currently on!

“I can only suspect that we would have had to jump through all their hoops because of our debt-to-income ratio, which encompasses my medical bills,” Heather says. “Trust me, I wish I could pay off my debt faster, but we’ll get there! Slow and steady.”

Meanwhile, Heather considers herself one of the lucky ones—even though there is no known cause or cure for the illness she has.

“It has taught me to appreciate every day and to see the small things in life that are a gift. I may have to take the elevator up one flight of stairs because I have to conserve my energy, but I still get to get up, go to work every day, and live!” she says.

“Some people may curse me under their breath because I slow them down by making an elevator stop or not being able to walk fast enough in a crowd, but, hey, life does not pass me by. Scleroderma may have slowed me down, but it slowed me down to see all the blessings around me!”

What can you learn from Heather’s story?

Know what bad marks are in your credit file.

• You can’t address your medical debt without knowing what’s in your credit report. As I described in “The Rising Star” profile of the Credit chapter, you can learn what’s contained in your file for free by going to AnnualCreditReport.com. If you have to do a dispute based on what you learn, follow the procedure I outlined in that profile as well.

Consider small claims court if all else fails.

• If challenging an error on your credit report doesn’t work, consider small claims court. File a suit in the county where the adversary lives or does business. Call the clerk of the court in the county where you’ll be filing to learn that court’s procedure. You’ll pay a filing fee of generally less than $100 that is recoverable if you win.
• Small claims court is really best used as a tactic to call the errant party’s bluff and get them to remove the bad mark on your credit. That’s what you really want. But if you don’t get your desired result once the medical provider is served notice of the suit, you want to appear well organized with strong documentation that shows how you’ve been harmed, why the person or company is responsible, and how much you’re seeking in damages.

Find the right buttons to push.

• I recently heard from a caller to my show who was involved in a fee dispute with a dentist over the cost of services that had been rendered. She resolved her beef by appealing to the state insurance department.
• There’s a teaching lesson here for everyone. You’ve got to push as many buttons as you can until you find the right one. The insurance commissioner’s office in her state had no real jurisdiction over the dentist, but they used moral suasion to make things right for this consumer.
• If you have a fee dispute with a medical provider, you have options. If it’s a dentist, the local chapter of the American Dental Association (ADA) usually will have some form of panel where you can file a fee dispute administratively just as the caller did with the state insurance department. For a doctor, check with the local affiliate of the American Medical Association (AMA) for the same procedure. Visit ADA.org and AMA-ASSN.org, respectively, for more info.

Never give up hope.

• Many of us face health difficulties in our life. But I want you to take a tip from Heather’s playbook. Though she has a chronic disease, she doesn’t sacrifice her life to it. Make no bones about it, her day-to-day existence is difficult. Yet she gets up and goes to work every day and refuses to let scleroderma get the best of her.
• Earlier in this book, I quoted Winston Churchill about never giving up. The British Bulldog also has another zinger that applies here: “If you’re going through hell, keep going.” Heather, your spirit of perseverance greatly impresses me and I hope it does the same for others! Keep on doing what you’re doing!