Say you finally got your finances in order when, out of the blue, you required hospitalization. You recovered, but now you have a big bill. Because your insurance policy isn’t rock solid, your savings could be depleted, leaving you with debts you can’t cover.
Here’s what to do if that happens.
Calculate How Much You Owe
According to Medical Billing Advocates of America, about 80% of bills it examines have errors. So, before you consider options for paying off medical debt, be sure to examine your medical bills. Common errors include unnecessary or unused supplies for a procedure that never occurred, billing code mistakes, duplicate charges, or insurance errors.
Go through each line of your bill with the hospital billing department to correct inaccuracies. If you have charges that seem particularly high, that could mean incorrect coding. Ask the billing department about this as well. If you suspect insurance errors, contact the company’s customer service department.
Consider Hiring An Advocate
If your debt is through the roof, you may want to hire a patient or medical billing advocate to go over your bill for mistakes and negotiate with the hospital. This may run you $100 or $200 hourly, or between 20% and 30% of the amount saved. In the big picture though, such a move could be beneficial.
Speak With Your Provider
You may be able to get the hospital to sign off on an affordable payment plan if you contact them early enough in the process. It also could be in everyone’s best interest to settle on a figure that saves the hospital the trouble and cost of sending your bill to collections. Be sure to get all payment agreements in writing. In addition, if there’s unfair billing for a botched medical procedure, say, speak with the hospital’s risk manager to challenge the charge.
Resist Paying With Plastic
While it can be tempting, avoid charging your medical debt to your credit card. For one thing, you could be transferring a debt that is interest free into one that immediately accrues interest.
If you put a $4,000 hospitalization bill on a credit card at 18% interest, for instance, you’d have monthly payments of $200 for two years, costing you roughly $800 in interest.
Also, if you have future emergencies, you could increase your obligation and max out your card. Remember that a high credit utilization ratio – how much of your available credit you use at any given time – will hurt your credit score.
Consider Settlement or Negotiation
You may want to check out medical debt relief programs to see whether a debt settlement program would be right for you. You can also have credit counselors negotiate a payment plan with your healthcare provider.
Ask The Hospital For Financial Help
Nonprofit hospitals are required by law to give financial assistance to low-income individuals who cannot pay their medical bills. You could end up paying just a portion of your balance, or have it totally written off.
Even for-profit hospitals can opt to voluntarily help you. State law may even require the provider to provide financial help. It could be worthwhile to check into it.
So, now that you know your options for paying off medical debt, you can sit down with your family and put together a plan that’s right for you.