15 tips for paying high medical bills
Negotiate before using credit cards to finance medical expenses
If you've been hit with an unexpected medical bill, your first thought might be to reach for your wallet and pull out a credit card. Don't, experts say.
Savvy consumers should comparison shop for payment options when paying for medical expenses. Consumer counselors suggest negotiating lower bills with medical providers before paying the bill.
Here are some helpful tips to cope with high medical bills:
1. Everything's negotiable. You may be able to get a portion of the bill reduced. A hospital bill typically includes items for surgery, anesthesiology, medications, X-rays and other expenses. Contact information for each should be included on the bill. Try talking to the service providers to see if they will reduce their fees in any way.
2. Payment plans. If you can't pay the entire balance at once (and many people can't), work out a payment plan with the doctor or hospital. Some charge no interest; others do. Make sure the plan is realistic and based on your ability to pay. Stick to the plan. If your circumstances change, contact the medical provider and try to negotiate a different arrangement. Get all payment terms in writing by asking the medical provider to send you written confirmation so there is proof.
3. Credit reports. According to Experian and TransUnion -- two of the three major credit reporting agencies -- hospitals, doctors and medical providers rarely report payment information to the bureaus. "Accounts reported by medical businesses account for only .07 percent of our data," according to Maxine Sweet, Experian's vice president of public education. Adds TransUnion spokesman Steven Katz: "These types of debts are not typically reported unless they become delinquent and are assigned to collections." On the other hand, payments on credit cards, installment loans and lines of credit are all reported to the credit bureaus. So working out a payment plan with the doctor or hospital may be a better option for you if you're concerned about medical debt lowering your credit score.
4. Charity begins at the hospital. The majority of hospitals across the country, especially nonprofit hospitals, have charity care programs that pick up all or part of the cost of care for indigent or special needs families. Some restrict such aid to the uninsured or offer discounted services to the insured with limited incomes. Medical bill negotiators complain, however, that the availability of these programs is often poorly publicized in hospitals. Patients must often ask about them and actively seek them out. Don't be embarrassed to ask! Hospitals have financial counselors and patient advocates who may be able to offer advice.
5. Accurate billing. Review the bill. Hospital bills often arrive several weeks after your visit and may be several pages long. Don't put it aside for later. Go through the charges. Are they accurate? Billing disputes should be resolved before putting the expense on a credit card or loan installment. The Citi Health Card offers bill dispute protection for cardholders. Sam Wang, public affairs vice president for Citi, wrote in an e-mail: "If a customer is dissatisfied with the product/service to the point they dispute payment, they should contact Citi. We will then work with the medical provider to attempt to resolve the issue with the service and/or product. If we are unable to do so to the satisfaction of the customer, the transaction is subject to charge-back to the merchant." Ask if the financing plan you're considering has a billing dispute provision.
6. Collection agency calls. Don't ignore them. If your account has gone to a collection agency, you have already received written notice in the mail. Dodging or avoiding the collector will only make matters worse and further damage your credit report. "Even if you can't pay, just call and say, 'I can't pay,' " advises Michelle Dunn, an author and CEO of Michelle Dunn's Credit and Collections Association, a collection agency trade group. "As long as you're having the contact, then the people aren't thinking you're trying to avoid paying them."
7. The fine print. If you have a company-sponsored health insurance plan, pay attention to the details of what's covered -- not just how much the office visit co-pays are, but the lifetime cap, the deductible, and what services are or aren't covered. "In order to judge whether or not an insurance product is adequate you have to look beyond the premiums," says Andrew Cohen, a counselor at The Access Project, a Massachusetts-based nonprofit group that gives consumers advice on resolving medical debt problems. "You have to look at what it covers and the cost sharing."
8. Denial of service. A medical provider may ask you to pay all or some of your outstanding balance before you can make another appointment. This may be less likely to occur if you have been in touch with them and followed through on repayment plans in the past. If you have a long relationship with the doctor, ask to speak to him or her directly to plead your case. Note: By law, if you have a medical emergency, a hospital must treat you regardless of your ability to pay.
9. Local assistance programs. Your state or local government may have assistance programs that can help offset medical costs. Call your city, county or borough government representative or municipal social service agency or community organizations.
10. Support groups. Connect with local support groups and charities. Members of cancer, diabetes, autism or other illness support groups may prove a valuable resource base for finding doctors as well as navigating the complex health care system.
11. A little help from your friends. Feeling overwhelmed or intimidated by the whole process? Medical bills can be complicated as can figuring the best payment options for your family budget. If you're facing a medical crisis, you may not have the time or energy to deal with the fine details, but are comfortable in asking a friend or someone you trust to help. Because of privacy laws, that person will need written permission to discuss the details of your bill with the hospital or doctor.
12. Do your homework. When looking for a new doctor, in addition to asking questions about weekend office hours or board certification, ask about financing options for bill payments. "You want to know the terms beforehand," says Candy Wright, a counseling manager for GreenPath Inc., a Michigan nonprofit consumer credit counseling agency. Ask ahead of time about refund policies if you decide you no longer want the medical procedure.
13. Budget. Budget. Budget. Everyone should have a family budget and have money set aside in an emergency fund. Most financial planners advise having at least three to six months' living expenses in case you are unable to work or are hit with an unexpected bill.
14. Insure against job loss. Consider getting short-term disability insurance, which pays you part of your salary should you become ill and cannot work. Loss of income from an illness is a major factor in many personal bankruptcy filings.
15. Nonprofit credit counselors. Get help. Find an accredited counseling agency to help you sort through the bills and draft a payment plan that works for your family budget. Call The Access Project toll-free at 866-918-5232, ext. 231, for advice on medical debt resolution. GreenPath Inc. can be reached at 866-476-7284. The two major accrediting agencies for credit counselors are the National Federation of Credit Counseling and the Association of Independent Consumer Credit Counseling Agencies. Each has an online referral service to certified local counselors.
See related: Is your doctor checking your credit report?
Updated: June 3, 2013
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