If you find yourself in a situation where you’re dealing with high medical bills or medical debt, it can be overwhelming. You’ve already gone through the negative experience of the illness or injury stemming from what led you to need medical care in the first place. Then, you have to figure out how to pay the debt off.
The first thing to know is that if you were hurt because of the actions or negligence of someone else, you might have a legal claim for compensation. For example, if you’re hurt in an accident that’s someone else’s fault, their insurance might cover your medical expenses.
Aside from those situations, there are ways you can lower your medical bills and reduce your healthcare-related debt.
What to Know About Medical Debt
Medical care is incredibly expensive in the United States. Even when you have a great health insurance policy, it’s not likely to cover all of your costs. You might be trying to figure out how to pay for the difference.
In early 2022, according to the Consumer Finance Protection Bureau, 20% of households in the U.S. were reported to have medical debt. That means nearly 65 million people in America are dealing with this financial burden.
Of the bills that go to collection agencies, 58% involve medical debt.
The Kaiser Family Foundation did an analysis recently and found that around 23 million Americans have a medical debt of at least $250. Eleven million people in the country owe more than $2,000, and three million owe more than $10,000.
Medical debt in America works like most other forms of consumer debt. If you owe a medical provider or organization, you’ll receive a letter or call that lets you know your bill is being sent to collections.
Even if you’re making regular payments, you might still be sent to collections if you’re not paying within an acceptable period of time.
Sometimes people are surprised to learn just what insurance won’t cover.
You should study your coverage carefully and ask for an Explanation of Benefits. Before you get a planned procedure, get in touch with your insurance company. Ask them what you’ll be responsible for and what they’re going to pay.
There’s also something called the Healthcare Bluebook you can reference. This online service lets you determine what a fair price is for a given medical procedure based on where you live.
If you don’t have insurance, your health care provider might work with you to pay them directly.
The good thing about medical debt that recently occurred is that Equifax, Experian, and TransUnion, which are the three main credit reporting companies, said they would eliminate negative marks on credit reports created by certain types of medical debts in 2022.
Changes included removing negative marks for people who settled a debt after it went to collections. Around 70% of people’s medical debts listed on their credit reports are said to be affected by the decision.
Medical debt under $500 is being excluded from credit reports, and unpaid medical debts will now appear only after a year of being in collections instead of six months.
Below are some specific ways you can also deal with medical debt.
Make Sure You Really Owe It
Medical bills are often inaccurate—in fact, it’s much more common than you might think. In one report, it was estimated that around 80% of bills have one or more errors.
If you have any medical bills, closely review them, and if you didn’t initially get an itemized bill, request one.
Duplicate charges for the same service are one of the frequent errors people often identify as a charge for services you didn’t receive. If you aren’t sure about something you see on a bill, ask your provider.
There are also surprise medical bills that you can get if you have private insurance. They’re unexpected bills you get from providers who aren’t part of your insurance company’s network.
Emergency room doctors are frequently surprised billers. Ambulance rides and anesthesiologists also fall into this category.
A surprise bill can be especially expensive because there’s no rate negotiated between the provider and the insurance company.
The provider can then bill you for anything the insurer didn’t pay, which is known as balance billing. Some states are enacting laws to protect consumers against this. Someone with Medicaid or Medicare shouldn’t receive surprise bills because they don’t allow balance billing.
After you review your bill, even if it’s accurate, you should try to negotiate. In a survey from Lending Tree in 2021, three-quarters of respondents said they’d tried to negotiate a bill, and 93% of those people said they were successful in either getting it reduced or altogether dropped.
Hospitals and medical practices are used to working with patients who want to negotiate a discount.
Under the stipulations of the Affordable Care Act, nonprofit hospitals are required to make financial assistance available to patients who are low-income. Most hospitals are non-profit. Non-profit hospitals are also required to post their policies online, and if you qualify, you could be eligible for a partial or full reduction of your bill.
Ask for a Payment Plan
If you try to negotiate and that doesn’t work, or even if it does, but you still have more to pay, you can talk to your provider about a payment plan.
Before you approach the provider, it’s best to have a particular monthly payment amount in mind, based on your income and expenses. Many providers will work with you on a repayment plan that’s low interest or perhaps interest-free.
The provider would rather get the money over a longer period of time than not at all.
Finally, you might also be able to convince the provider to give you a discount if you pay your bill by check or cash in a lump sum. It gives the provider their payment faster, and they don’t have to pay fees for credit card processing.