Medical Debt Options That Won’t Make You Sick
Medical debt is a growing problem in the country. Unlike some other kinds of debt, medical bills may be out of your control and you won’t always have a choice about the care and services you are getting and then paying for. Many people can feel ashamed of medical debt and see it as a personal failure when they aren’t able to afford medical bills.
For those with medical debt and no way of paying it, the consequences can be dire. People may forego care that is needed, including tests, treatments, prescription medications, and other doctor’s appointments. Those with medical debt may also struggle to pay off other bills, damage their credit, deplete long-term savings, or declare bankruptcy. These can all be problems that can take years to overcome.
What is Medical Debt?
Medical debt can be out of your control and is any sort of debt that adds up for medical purposes. It can be because of an accident or an illness. It can also accumulate as your loved one is in hospice care or fighting a long-term illness.
Take a look at the options for medical debt relief.
1. A Payment Plan
Medical providers of all kinds, including hospitals, dentists, and physicians, may be able to work out payment plans for you. This is one of the most common and simplest ways to get a bill paid when you can’t do it in one payment.
You can typically break the payment into a number of equal payments over a course of time until the bill is paid off. Before you agree on a payment plan, ask if there are charges or fees, such as interest associated with the plan, so you can see how affordable it is.
2. Medical Credit Cards
If the provider isn’t able to make a payment plan with you, it still may accept medical credit cards. They work like regular credit cards but are for specific medical procedures. Many physician offices have applications for these so you can easily apply for the card.
Many of these cards have an interest-free period of about six to 12 months. Make sure you do the math to see if you are able to pay off the debt within that period. If you aren’t able to pay off the debt then you could be hit with a deferred interest rate, which can make the debt much more expensive. Know what extra costs you would be faced with if you are hit with deferred interest, in order to know if this is the right option for you.
3. 0% Interest Credit Card
If a medical credit card isn’t an option for you then a 0% interest card can be the right choice. However, you will need excellent credit in order to qualify for one. You should figure out if this is an option for you before your credit is damaged from unpaid medical bills. You do need to pay off the balance before your promotional interest ends and your interest rate starts.
If you do decide that this is the right option for you, make sure you are only putting medical bills on this card. If you don’t then it’s going to be harder to keep records of your expenses for medical savings accounts or tax deductions.
4. Personal Loans
You can get a personal loan or even a personal medical loan to help you consolidate medical bills or pay for planned or emergency procedures. You may want to consider this option after you have already exhausted other options since there is no option here to not pay interest on your medical debt.
The loan amounts can range from $1,000 to $100,000 so if you do have a large amount of medical debt, this can be the best option. Be sure to shop around in order to compare rates on medical and personal loans, along with repayment terms and fees. If you’re interested in getting a personal/medical loan, insert your information and you may get offers that suit your needs best. It’s quick and simple:
5. File for Bankruptcy
This should be your last resort but you should know that medical debt can be discharged in bankruptcy. However, bankruptcy shouldn’t be done lightly since it ruins your credit report and makes it harder to qualify for any debt in the future. A bankruptcy will stay on your credit report for up to 10 years.
If you need some help with deciding if filing for medical bankruptcy is the right option for you, you should discuss your options with a bankruptcy attorney. If you end up filing for bankruptcy, you can find some helpful advice in this video, in order to be financially healthy again!
Medical Debt Is Common
Medical debt is actually a very common problem in the country and it doesn’t just affect those without insurance or low-income households. There are about 137 million U.S. adults that are currently carrying medical debt and wondering how to pay those bills. Those with insurance and higher incomes can also be affected by medical debt.
Many will try to respond to medical debt by delaying major household purchases, delaying vacations, borrowing from family and friends, tapping into college savings or retirement, or working more. However, there can be other ways to face medical debt and still keep yourself in a safe spot financially.
Put Your Family First
Don’t let the prospect of medical debt stop you from taking care of yourself or your family. If you are currently experiencing a medical problem then you don’t want to worry about those impending bills while you and your family are healing. Do what you can to stay calm and wait until your family is healthy before you start worrying about the bills. Then you are able to create a plan that can help you pay them off.
Check for Errors on Your Bill
Medical bills can often include costly mistakes. The amount of bills that contain errors varies depending on different sources but one important fact is that it’s necessary to review them carefully. The best way to start reviewing your medical bills is by reviewing the explanation of benefits statement from your insurance company. Start with this process as soon as you receive the bill.
Look for any services you didn’t receive, duplicated items, or services that you don’t recognize. Also, look for services that your insurance company should be covering. Look at your healthcare provider’s bills to make sure that services insurance should have paid for actually did. Speak with the billing department of your insurance company to clarify things you don’t understand and look for any mistakes.
You can also go the more advanced route and get copies of medical records and then compare your records with charges you have been billed for. However, this can be complicated and you may need an expert’s help to not only get those records but also make sense of them. When you are looking at the bills, it’s not about getting out of paying them but making sure you are being billed the right amount for services you actually got.
Negotiate Your Bill or Apply for Financial Hardship
If you want to attempt to negotiate your bill then you need to speak with the medical billing manager for your healthcare provider. This is the person that has the authority to lower the bill. You don’t want to wait on this so you should do it once you receive the bill and have looked it over for any errors. You don’t want to wait until the bill is delinquent since at this point your credit is already suffering. Keep in mind that it can be easier to negotiate medical bill payments, unlike other kinds of debt.
If you have a financial hardship or low income then request hardship assistance. You can do this even if the hardship is just due to the medical bills. Hospital charity care can help based on savings and income. Some hospitals may even be required by law to provide reduced-cost services or free services to those with low incomes. This is why it’s important to do this as soon as your bills arrive. Each hospital will have its own procedure when it comes to financial hardship and some may require that you apply for Medicaid first. If you are rejected from Medicaid then you can apply for help directly from the hospital. Hospitals can have an easier process for applying but it will require a lot of paperwork. You will have to file the application and provide information about your bank account, paychecks, and tax returns. The hospital will review it and then determine a discount.
Another strategy to negotiate your bills is to compare the price you were billed to the fair price or average price charged by other providers in the area. You can use websites such as Healthcare Bluebook in order to have a better understanding of what you should be paying for the services you received. If you do have health insurance, your health insurance website may also have a tool that can allow you to see and get an estimated cost of different kinds of procedures.
Be an Advocate for Yourself
Being an advocate for yourself can help you with negotiating your medical bills. For example, you could say something such as, “If I pay 40% right now will you then write off the rest?” This can work since your provider will save money and time if they don’t have to pursue payment from you for years. If you aren’t able to afford to pay even a percentage of the bill right now, you could also just ask for a discount if you are able to make some sort of down payment.
A less aggressive strategy you can use is to ask the provider to charge you the discounted fee that Medicaid or Medicare pays. If you aren’t able to do a reduced payment then ask about other payment plans. If your provider does accept some of these terms, make sure you get them in writing. Remember that it doesn’t hurt to ask and negotiate, and even if your provider doesn’t agree to reduced terms or a payment plan, you at least exhausted your options and can move on to figuring out how to pay off the bill with other efforts.
Get Some Outside Help
There aren’t many experts when it comes to medical billing so you may want to get some help paying medical bills from those that are. This can include a medical billing advocate, debt negotiator, or medical caseworker. These types of professionals may be able to reduce what you need to pay when you are too shy to try or you can’t.
Medical billing advocates are nurses, lawyers, healthcare administrators, or insurance agents who can also help lower and decipher the bills. They can look for errors, negotiate on your behalf, and appeal excessive charges. However, you do have to pay for these services and you can expect to pay an advocate about 30% of the amount your bill was reduced by. Make sure the fees charged by the advocate are worth the savings before you sign up for a plan.
You may also speak with a caseworker from the insurance company or hospital if you need some help with payment issues or understanding your bill. A caseworker can also refer you to organizations that may be able to give you financial assistance.
If a medical debt has caused you to have other types of debt that you are now struggling to pay, work with the American Fair Credit Council. This organization helps you find reputable debt relief companies to work on reducing your principal balance or the interest rate you face. This can help you pay off your debt and get your credit back on track.
What You Shouldn’t Do When It Comes to Medical Debt
There are two things you don’t want to do when it comes to medical debt:
You don’t want to just jump at a quick fix without reviewing your options and you don’t want to ignore it completely.
Both of these options could cost you more in interest and then put your credit score at risk. For example, if you jump at a supposed quick fix then you may put medical bills on an existing credit card. This can make your provider happy but then you end up facing a double-digit interest rate, especially when you aren’t able to pay the balance in full once your statement arrives. When you carry a balance on your credit cards, it is easy to get into a never-ending cycle of debt because of the high interest payments. This has a big effect on your credit score.
If you ignore your medical bills then it will cause you to be delinquent and debt collectors will be calling you and it can end up in a lawsuit. When it comes to your credit report, there is a little bit of good news. There is a waiting period of 180 days that unpaid medical debt shows up on credit reports. Medical accounts that are in collections and then are later paid by health insurance are removed from your reports.
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Dealing with Collections Agencies
If you have already let your medical debt become delinquent, you do need to deal with the collections agencies. If it’s an internal collections agency, such as those at a doctor’s office or hospital, then those are more willing to negotiate a plan and then hold off on sending the information to third-party debt collectors.
What Collectors Can Do:
Debt collectors can’t actually call you an unreasonable number of times and that includes after 9 p.m. or before 8 a.m.
They aren’t able to call you at work, threaten to sue without reason, tell you that you have committed a crime, or threaten to tell others about your debt. While talking to debt collectors can get heated, they aren’t allowed to threaten you. You should record any calls and get everything in writing. If a debt collector does threaten you then you have the right to sue.
When you do come to an agreement, get it in writing, and don’t make any payments until you have the physical document of the writing.
Keep proof of all your payments so that if there is a question of whether or not you paid your debt, you can prove you did.
Debt collectors do want to get debt paid in full but if you offer to pay what you can and stay firm, it’s likely that they will accept. When negotiating this, you should expect a couple of counteroffers since this is what debt collectors are supposed to do.
Finally,
While medical debt is common, it doesn’t mean that it’s something fun to deal with. There are many different options when it comes to paying off your medical bills and each option will come with its own pros and cons that you should weigh to figure out the best solution for you.
The one thing you don’t want to do is ignore your medical bills since this is the one type of debt where there are a lot of options for you to pay them down and avoid unnecessary financial hardship with a bad credit score.