How to Deal With Medical Debt

If you’ve found yourself in a position where you’re having a hard time paying off medical debt, you’re not alone.

According to a 2016 Kaiser Family Foundation and New York Times survey, more than one in four Americans had difficulty paying a recent medical bill.

Doctor and hospital bills are an unfortunate fact of life here in the U.S. And unlike some other areas of your life where you might make some sacrifices in order to save money, your health is not an area where you want to cut corners.

Still, money expert Clark Howard says there are some things you can do if you’re facing medical bills or debt that have you wondering how you’re going to pay.

What to Do When You’re Facing Medical Debts You Think You Can’t Afford

Table Of Contents:

• Make Sure Your Bill Is Right
• Negotiate Your Bill
  
• Try to Work Out a Payment Plan
• Apply for Medical Financial Assistance
• Consider a Loan
• Know How to Deal With Debt Collectors
• Minimize Medical Debt by Negotiating Before Treatment

Make Sure Your Bill Is Right

Clark is a big advocate of negotiating the cost of your medical treatment before you undergo any procedure (more on that later), but if you’ve been hit with a big bill that’s more than you can afford, you do have some options.

If your treatment happened relatively recently, the first thing you want to do is make sure you’re not being overcharged. Hospitals and doctor’s offices sometimes make mistakes, and medical coding can be tricky business.

You want to check your medical bill carefully to make sure you’re being charged for the care you were given and nothing more. If you see something on your bill that doesn’t make sense or doesn’t look right, it is perfectly reasonable to ask your medical provider to explain why it’s there. This includes both services that were provided and any medication you might have been given.

Enlist a Medical Billing Advocate

There are estimates that as many as 80% of medical bills contain errors. But if you don’t know what you’re looking for, identifying those errors can be difficult or impossible.

Medical billing advocates are professionals who, for a fee, will go over your bills with a fine-tooth comb to make sure everything is correct. If it’s not, they will advocate for you and even negotiate on your behalf.

The Patient Advocate Foundation offers free assistance and can help you find a medical billing advocate. You can also visit Claims.org to locate one near you. Though a medical billing advocate may charge a small fee, the money they can save you could be well worth it.

Negotiate Your Bill

Once you are certain your bill is correct, your next option is to negotiate the bill with your health care provider. This is especially true if you don’t have health insurance.

“If you’re someone without insurance, hospitals bill you based on a fake retail price that nobody pays,” Clark says. “That’s what destroys people’s finances and forces people into bankruptcy.”

So, rather than just paying what the bill says you owe, talk to your doctor or hospital about a discounted rate. After all, for them, some money is better than no money — which is what they’d get if you simply didn’t pay your bill.

“You want to push really hard to negotiate for around 20 cents on the dollar,” Clark says. “That’s about what a traditional health insurer would pay versus retail.”

Try to Work Out a Payment Plan

Even if you’re able to negotiate your bill down, you’ll still likely have to pay something. If the total is too much for you to afford in one lump sum, consider trying to work out a payment plan with your provider.

See if your hospital or medical professional will break up your debt into more manageable equal payments that you could make over time. Ideally there would be no interest or fees associated with the payment plan because that would just add to your debt.

Requesting a payment plan as early as possible after receiving your bill is advisable, as it demonstrates your desire to pay what you owe. This makes it more likely that your provider will be willing to work with you.

Apply for Medical Financial Assistance

If negotiating your bill and/or working out a payment plan still hasn’t made the medical debt you’re facing manageable, there may still be hope. Much like colleges, many hospitals have financial assistance programs. In fact, according to U.S. News & World Report, nonprofit hospitals are required to offer it.

Also called “charity care,” financial assistance policies will vary from hospital to hospital, but may allow you to receive free or discounted medical care if you meet certain eligibility requirements. Check with your hospital to see if you might qualify.

Consider a Loan

While it’s far from an ideal solution, taking out a loan to pay your medical debt may be a last-resort option. This is especially true if you expect your financial situation to improve in the future. By taking out a loan in the short term, you might be able to avoid your debt going to collections and hurting your credit or — worse — having to file for bankruptcy.

If you do decide to get a loan, you’ll want to make sure it has a reasonable interest rate and that the monthly payments are manageable for you. Of course, you will need to have good credit to qualify for the best rates.

Read more about whether a personal loan is right for you here.

Know How to Deal With Debt Collectors

If none of the above options work for you and your medical debt goes to collections, it’s important to know how to deal with debt collectors. You can negotiate things like reducing the amount of the debt and payment terms with collections agencies, but you have to be careful.

“If an item’s already been turned over to a collections agency, any agreement you have to settle a debt needs to be in writing — that whatever you’ve agreed to pay is payment in full,” Clark says. “Never give anybody any money over the phone. Don’t give your checking account number, credit card number or anything like that unless you have it in writing that payment of that amount of money is payment in full.”

Read more about how to deal with debt collectors here.

Minimize Medical Debt by Negotiating Before Treatment

Clark’s most important advice about medical debt might be too late for you right now, but could help in the future.

“If you have a non-emergency issue that’s going to require that you have medical care, you’re going to want to negotiate everything up front,” he says. “A lot of providers, if you pay cash up front for whatever your share is going to be, will offer you a better price than if you’re billed later.”

Make some calls to various medical providers to see what they charge for the procedure you need. If it’s available for less somewhere other than your preferred provider, use that as leverage to try to get a better price.

You can also use sites like FAIRHealth Consumer and Healthcare Bluebook to see what different medical and dental procedures should cost in your area.

“Negotiating place-to-place is also really important,” Clark says.

Finally, it’s almost always to your benefit to get treatment at a doctor’s office or clinic if you can.

“Anything you’re able to do outside of a hospital environment, you want to do outside of a hospital environment,” he says.

Have more questions about dealing with medical debt? Contact Clark’s Consumer Action Center — a FREE help line open Monday-Thursday from 10 a.m.–7 p.m and Friday from 10 a.m.–4 p.m. EST. We have volunteers available to answer YOUR concerns! Call Team Clark at 404-892-8227