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Smaller medical bills are more likely to be sued out than large ones

by | Nov 13, 2023 | Bankruptcy, Chapter 13, Chapter 7, collections, medical bills

A recent study commissioned by the State Bar association showed that smaller medical debts are more likely to be pursued than larger debts. The article goes on to surmise that because they are so small, people don’t fight them, and that there is a disproportionate impact on poor and minority populations.

The headline also indicates that smaller debts are “too small to fight”. My experience is that most unpaid medical bills are the result of an inability to pay, not an actual underlying dispute as to whether the care was provided.

It seems somewhat ironic that larger debts are less likely to provoke lawsuits, and if in fact it is true, I would surmise that it is because either hospitals carry insurance for huge uninsured bills, or more likely, that hospitals encourage people to seek public benefits. That may be effective for the lowest income people, yet the working poor can’t afford health insurance and don’t qualify for medical assistance or MNCare.

My experience is that medical creditors are less likely to settle than other creditors. A calamity that results in collection of substantial uninsured medical costs, (which is usually coupled with a reduction or loss of income), is one of the most common triggers of people seeking bankruptcy relief, which is oftentimes the most efficient way of resolving such past due, unaffordable debt.