Retirement’s Black Hole — Medical Debt
Nearly 90% of older adults who report having trouble making payments on their credit cards are carrying medical debt, according to a recent TSCL survey. TSCL is concerned that too many people over the age of 62, living on fixed income, facing rising costs as Social Security benefits remained flat for the past seven years, are spending their retirement juggling credit card bills and fending off debt collectors.
In some cases, debt collectors are hounding people, using illegal threats to garnish their Social Security or other federal benefits. Some times the calls are fraudulent altogether, from scammers seeking Social Security and bank account numbers. Recipients of the calls report a high level of stress, some are frightened, and some have sent money just to stop the calls, even though they didn’t believe they actually owed any money.
It’s important to understand that your federal benefits, including Social Security and military retirement benefits, are protected in debt collection. When you receive Social Security by direct deposit to a checking account, the bank is required automatically to protect up to two months’ worth of these benefits. If you receive benefits on a government-issued prepaid card, these are usually protected as well.
If you, a family member, or someone you know is having trouble paying healthcare costs, with mounting debt, abusive or suspicious calls from debt collectors, TSCL recommends that you contact your local area agency on aging, or local adult protective services department to get help. Although programs differ by the state where you live, agencies on aging and local senior services departments and online websites can help you in three important ways:
- Help to find trusted financial counseling. You can find resources in your community to help manage your budget, save money, protect yourself from scams and set financial goals. A good place to start is information online at EconomicCheckup.org provided by the National Council on Aging.
- Help you find legal counseling or legal aide. Your local adult protective services department can help you learn about laws, file a complaint, and learn tips to handle debt and stay safe from scams. Online, visit the Consumer Financial Protection Bureau at consumerfinance.gov.
- Help you learn about programs to help you stay economically secure. Counselors at your agency on aging can screen and help you apply for benefit programs to help reduce your medical costs — like programs that help pay your Medicare Part B and Part D premiums and out-of-pocket costs. Visit benefitscheckup.org.
We urge you to take inventory of the resources in your area that could help provide greater economic security by contacting your local area on aging or senior services department. TSCL supports the Older Americans Act and the senior programs provided by the legislation.