9 ways to negotiate large hospital or doctor bills
Even if your health insurance is excellent, you could be left with significant medical debt if you need to have a costly procedure done or a long-term illness. You may make ends meet if you have an emergency fund and other savings. You may have to talk to your doctor to agree to affordable monthly payments until you can pay off the debt. These are nine steps to make it easier.
KEY TAKEAWAYS
- Common errors in medical billing are
- Many hospitals and medical providers will reduce your owe amount if you can prove that you cannot repay the full amount.
- Providers might also be open to working with you to set up a repayment plan that spreads your payments over a reasonable period.
You Are Responsible for Your Money
The accuracy of medical bills is a well-known fact. One widely-published report states that 80% of medical bills are inaccurate. If you haven’t received one, ask for an itemized bill. Duplicate charges for the same service or charges for services that you have not received are two of the most common mistakes. Your provider should explain to you the cost of a charge or any other details.
Private insurance can lead to unexpected medical bills. You get unexpected medical bills from a provider not covered by your insurance. Emergency room doctors and anesthesiologists most commonly incur surprise bills.
Surprise bills can be very high because the provider and your insurance do not have negotiated rates. The provider can charge you for any amount that the insurer did not pay. This is often referred to as balance billing. Some states have laws that protect consumers against surprise bills. A federal law called the No Surprises Act is set to take effect on January 1, 2022. You should not be surprised by surprise bills if you have Medicare and Medicaid. These programs prohibit balance billing.
Negotiate It Down
You may be able to negotiate for a lower price, even if your bill was accurate. A 2021 LendingTree
The survey found that 33% of respondents attempted to negotiate a medical invoice and that 93% had succeeded in getting the bill reduced or dropped entirely.5
Hospitals and medical practices are used to treat patients
Lobbying for discounts is a common tactic. Many people are willing to lower their bills if requested. If you can demonstrate that it would be difficult or impossible to pay the entire amount based on your financial situation, this will make your case stronger. It is not a bad idea to ask.
Nonprofit hospitals, which account for most hospitals, must provide financial assistance to low-income patients under the Affordable Care Act. You can also view their policies online. You may be eligible to receive partial or full reimbursement of your bill if you meet certain criteria.6 This is often referred to as charity assistance.
Ask for a Workable Repayment Plan
Your medical provider might also agree to split your payments in a manageable manner.
For you. (Before asking, make sure you have a number that includes your regular expenses and income. According to the National Foundation for Credit Counseling (NFCC), many
Providers will work with you to arrange a low- or zero-interest repayment plan.
If you have the funds to pay your medical debt, you might be able to convince the provider to offer a discount for you to pay the bill in cash or by check. The provider will receive the payment immediately, but it will also avoid any credit card processing fees.
Seek Help
You have many options for medical bills assistance, some of which are free and some cost money. You can also hire companies and individuals to help you negotiate your medical bills. You can search online for a directory near you from organizations like the Alliance of Claims Assistance Professionals and the Alliance of Professional Health Advocates.
The National Foundation for Credit Counseling will direct you to a member agency that can help manage your debts. Credit counselling agencies can also help you negotiate a repayment schedule with creditors.
There are also philanthropic foundations that assist patients with a prescription or medical drug bills. The PAN Foundation is one of these organizations. It also has a list of funding sources available on its website.8
Prioritize Your Debts
There are likely other financial obligations than your medical debts. You will need to prioritize if you don’t have the income or resources to pay them all. Most urgent debts are those that keep you afloat, such as monthly mortgage payments, rent payments, utility bills, etc. The list may include medical debt. A credit counsellor can help you sort this out if you can see one. Reach out to creditors even if you can’t pay them.
Let them know what’s going on.
Know the impact on your credit
Like missed payments or unpaid medical bills, they reflect badly on you and affect your credit score. You have time to breathe, and that won’t happen right away.
Most healthcare providers offer, according to Equifax, one of the three largest national credit bureaus.
Do not report late payments to it or its main competitors (Experian or TransUnion), as they will not be reflected on credit reports and won’t factor into credit scores.
However, if your provider gives your debt to a collection agency, it may report the information to credit bureaus. The credit bureaus have made it a 2017 rule that the debt will not be reported to your credit report until 180 days have passed. This gives you more time to pay off the debt or negotiate a payment plan.
Do not use your credit card debt to pay for medical bills.
If you aren’t sure that you can pay the entire credit card bill before interest starts accruing, it is a common mistake to put your medical bills on a card. Credit card interest rates average 17.13%. This will delay the inevitable and cause you to accumulate a lot more debt.
You can use a credit card that offers 0% interest as an introductory offer, or you could put the debt on an existing card. Then transfer your balance to this card. These cards may not be available to you if you are in a difficult financial position and cannot pay your medical bills.
It is best to pay your medical bills by check or debit card. Make sure you also get a receipt. You will need a receipt if you need to get reimbursement via a flexible spending account or a health savings account. If you are charged again by the provider for the same service, you will need to show proof that you paid.
Other types of loans
A home equity loan or credit line could be an option to pay your medical debt if you have equity in your home. These loans have low-interest rates and can usually be repaid in five to twenty years. Your house secures them, so you may lose them if they are not paid on time.
Cash-out refinancing is another option for homeowners. You pay off your existing mortgage balance with a new mortgage that is higher based on the equity in your home. The difference between the two amounts can be taken in cash and used for whatever purpose you choose, even paying off debts. The downside is that the new loan will most likely require you to make higher mortgage payments.
Another option is a personal loan. You don’t have to put your home at risk by taking out these loans, which are usually unsecured. They have higher interest rates than secured loans and may not be available to you if you already have a significant amount.
The amount of debt. Lenders can offer personal loans to pay medical bills. These loans are often called medical loans.
Note
It’s best to keep your retirement accounts untouched up until you retire. However, if your retirement account has a 401(k), IRA or similar plan, it could be a source of cash to pay your medical debt. If your unreimbursed medical expenses exceed 10% of your income, you will owe income taxes on the money you withdraw. However, you can avoid the 10% penalty for withdrawals made before 59 1/2.
Declare Bankruptcy if You Must
Nearly 60% of consumer bankruptcies are due to medical bills12. But bankruptcy can have serious financial consequences that will affect your ability to obtain new credit, the rate you pay for insurance and whether you get hired by employers. It should be considered as a last resort.
If bankruptcy seems to be your only option, you will need to follow a set of steps.
By law. One is to complete a credit counselling session at a government-approved agency credit counselling agency. The certificate can be used to file your bankruptcy petition. The counsellor will assess your situation and suggest possible options for proceeding with bankruptcy.
The closest federal bankruptcy court can provide a list of counsellors. You will likely need to hire an attorney if you decide to proceed.
What is the minimum monthly payment for medical debt?
Medical debt does not have a minimum monthly payment. The minimum monthly payment for medical debt can be any amount you and your billing office agree on. Your payment should be sufficient to pay off the debt in a reasonable time frame and affordable enough to cover your regular monthly bills. You can also ask the billing office to reduce interest rates or waive interest.
Can You Negotiate Medical Bills Beforehand?
Except for emergencies, it is possible to negotiate your medical bills. Ask your provider how much the procedure will cost. If you cannot afford it, the provider might offer a discount. Call around to see what the cost of that service is at other providers in your region, or consult Healthcare Bluebook.
Are Medical Credit Card Deals a Good Deal?
You may be offered a brochure for medical credit cards in your doctor’s waiting area. They promise you that they will get paid. However, they are not necessarily a good deal for patients. They are limited in their use and can only be used for certain purposes. Their interest rates may be higher than those of other credit cards.
Consumer Action’s 2014 report found that many cards charge deferred interest. This allows interest to continue accruing even after a promotional period of 0%.
