When your health insurance company denies a medical claim, you are responsible for paying the debt. Failure to pay this debt could lead to a lawsuit filed by a medical institution or a collection agency. If you believe your insurance company wrongly denied your claim it's important to be as proactive as possible. This includes a thorough review of your health policy to understand exactly what's covered and what is not.
Contact Your Insurance Company
If you believe your insurance company has interpreted your health policy incorrectly, contact it as soon as possible. Resolving a billing error can stop the collections process and prevent a medical institution, or a collections agency, from continuing with a lawsuit. According to Bank Rate's website, even if your claim was initially denied your policy should contain procedures for filing a claims appeal. This process can detect errors in the interpretation of your policy and lead to your insurance company properly paying the claim in question.
Answer the Lawsuit
If you are being sued it's important you answer the lawsuit in writing to prevent a medical facility or collection agency from securing a default judgment against you. This means your creditor wins without you putting up a fight, which could lead to seizures of your bank accounts and wage garnishment. Answering the lawsuit involves a formal response mailed to the court stating that you are aware of the legal proceedings against and intend to appear in court on the date mentioned in your summons.
Sue Your Insurance Company
If your health insurance company has blatantly disregarded its obligation to pay a claim in accordance with your policy, suing it in civil court may be the only way to force it to pay. You may also report the insurance company to the attorney general's office in the state you live. If multiple complaints exist against the company, the attorney general's office may decide to launch an investigation. This can strengthen your own lawsuit and increase the likelihood of securing a judgment against your insurance company.
Declare Bankruptcy
If your insurance company has not erred in refusing to pay your medical claim, the debt is your responsibility. If these medical bills far exceed your income, declaring bankruptcy may be your last resort in eliminating the debt. Filing bankruptcy also grants an automatic stay, which prevents creditors from continuing collection proceedings, including lawsuits, while your bankruptcy is in process. Chapter 7 bankruptcy can expunge unsecured medical debts, but you are required to liquidate your non-exempt assets before the debt is forgiven. This could mean you lose valuable property such as your home or automobile. Chapter 13 bankruptcy can allow you to restructure your debts and repay them over a three to five year period. Any debt remaining at the end of repayment is expunged by the court.
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