can you be charged interest on medical bills legally?
I have medical biils all my life, now friend says they were making monthly payments on their medical bill, and this month got a charge for being so many days over bill due. is this legal? why would people making effort to PAY their bills be subject to this? some people could pay and never do-go their whole life without paying is this legal practice? all my years of making payments on my bills, I have never had late charges tacked on-this will make it impossible to get their bills paid when trying so hard-not fair!
1 Answer from Attorneys
Re: can you be charged interest on medical bills legally?
Expecting life to be fair is a little like expecting the bull not to charge because you are a vegetarian. It may make sense to you, but it is not the way the world works.
If a business (including a health care provider) announces its intention to charge interest on unpaid amounts, and you agree to receive service from this provider knowing this policy, there is a valid argument that you should pay the interest. There is even case law that suggests that if they don't charge you interest that you are getting a below-market loan, and the IRS can impute (a fancy way of saying they can assume you owe) interest to you as income. In some small way, the business may actually be doing your friend a favor.
But the answer to the question is simply that it is possible for them to charge interest, and if they reduce their bill to a judgment, they can get about 9% simple interest on the amount. The law recognizes that if the medical provider had that money, they could be investing it and benefiting from the investment. The law says that the time value of money is something that the creditor is entitled to. It may not seem fair, but there are rational reasons for the policy, and it is the way the world really works.
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