Jeffrey Wade
Medical bills can be expensive and hard to understand, and sometimes, despite having insurance, people may face high deductibles, copays, or coinsurance. In such cases, it is important to know that you can negotiate your medical bills and reduce your costs. There are several ways to do this, including checking for billing errors, contacting the healthcare provider or hospital to negotiate, and taking advantage of financial assistance programs or charity care. Additionally, you may be able to deduct a portion of your medical costs from your taxes if they exceed a certain percentage of your adjusted gross income.
| Characteristics | Values |
|---|---|
| Can medical bills be reduced? | Yes, medical bills can be negotiated and reduced. |
| How to reduce medical bills? | Ask for an itemized bill to review and ensure the charges are correct. |
| Contact the health-care provider or hospital and negotiate the bill. | |
| Check for billing errors, such as incorrect patient, provider, or insurance information, incorrect procedure codes, or duplicate billing. | |
| Financial assistance programs or "charity care" may provide free or discounted health care to those struggling to pay medical bills. | |
| The No Surprises Act can protect against owing the difference between out-of-network billed cost and the amount covered by health insurance. | |
| State agencies and the CFPB can offer assistance and protection against surprise medical bills and debt collection issues. | |
| Medical expenses that exceed a certain percentage of your adjusted gross income may be tax-deductible. |
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What You'll Learn
Check for billing errors
Medical bills are often complicated and hard to understand. It is important to check for billing errors and see if you can get your bill reduced without affecting your insurance deductible.
Firstly, make sure that you owe the bill. You could have already paid it, or the provider or debt collector may have confused you with someone else with a similar name. It is also possible that you have already paid more than in-network rates for a visit to the emergency room or an in-network facility.
Secondly, ask for an itemized bill so that you can review it and make sure the charges are correct. Billing errors are common, and hospitals may attempt to use them to get more money from you. You could be charged for something that was scheduled but then cancelled, or be billed twice for the same service. There may be errors in patient, provider, or insurance information, or incorrect codes for procedures. If you find errors, contact the provider and your insurance company to correct the issue.
Thirdly, if you have insurance, do the bills reflect the payment by your insurance and what the provider understood would be covered? Do any of the charges indicate a service was “out-of-network” when it wasn’t? If you are unsure, talk to the accounting or billing office of your provider. Their number and contact information will be on the billing statement.
If you are facing issues with your health insurance, many states provide Consumer Assistance Programs to help. You can also contact a patient advocate for assistance.
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Contact the health-care provider
If you are facing high medical costs, you can contact the health-care provider or the hospital and ask to negotiate. It is important to start this process early, as hospital bills are generally not sent to a collections agency immediately, so you have time to negotiate before making any upfront payments.
Firstly, make sure that you owe the bill. You could have already paid it, or the provider may have confused you with someone else. Ask for an itemized bill so that you can review it and make sure the charges are correct. Billing errors are common and can include incorrect patient, provider, or insurance information, as well as incorrect codes for procedures and duplicate billing. If you are unsure, talk to the accounting or billing office of your provider. Their number and contact information will be on the billing statement.
If you have insurance, check that the bill reflects the payment by your insurance company and what the provider understood would be covered. Do any of the charges indicate a service was “out-of-network” when it wasn’t? If you disagree with the charges or want more information, you have the right to an appeal with your health insurance company, including an “internal appeal” and an “external review” of the charges.
If you are uninsured, ask if the provider offers a discount for uninsured patients. You can also ask to pay the Medicare rate, which health-care providers are generally very familiar with. You can use sites like FAIR Health Consumer and Healthcare Bluebook to determine if a provider has overcharged you for a service and what price an insurance company would have negotiated for the service you received. Contact your healthcare provider's billing agency and politely ask that they honor that price. Many hospitals will negotiate a lower cost if you agree to pay the discounted total immediately.
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Seek financial assistance
If you are facing difficulties paying your medical bills, there are several options for financial assistance that you can explore. Here are some steps you can take:
Also known as "charity care," these programs provide free or discounted healthcare services to individuals who need help with their medical bills. The Affordable Care Act (ACA) mandates that hospitals with 501(c)(3) nonprofit status must offer such programs. Additionally, some states have charity care laws that require hospitals to provide additional financial assistance. You can typically apply for charity care through the doctor or hospital providing your treatment.
Government Programs:
Depending on your income, age, employment status, and qualifying health issues, you may be eligible for government programs that can assist with medical costs. These include Medicare, Medicaid, and ACA Marketplace plans. There are also Medicare Savings Programs that can help with Part A and Part B premiums, deductibles, coinsurance, and copayments.
State-Run Financial Assistance:
Certain states, such as Colorado, Massachusetts, and South Carolina, offer state-run financial assistance programs. These programs can provide support even if your medical bill is already in collection or you have been sued for the debt. Check with your state's official website or relevant departments to learn more about the specific programs available to you.
Contact the Hospital's Financial Assistance Department:
Even if a hospital is for-profit or private, they may have financial assistance policies in place to help patients with their medical bills. Reach out to the hospital's financial aid department to inquire about their policies, eligibility requirements, and the application process.
Debt Management Plans:
If you are struggling to manage your medical debt, consider a debt management plan. A credit counselor can work with you to develop a payment schedule based on your financial situation. This may include lower interest rates and waived fees to make repaying your medical debt more manageable.
Remember, it is important to be proactive and seek assistance as soon as you anticipate difficulty in paying your medical bills. By exploring these options, you may be able to reduce your medical expenses and find a path towards financial relief.
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Understand your insurance plan
Understanding your insurance plan is key to navigating the complexities of medical billing. Here are some detailed and instructive guidelines to help you comprehend your insurance plan and make informed decisions about your medical bills:
- Know your coverage limits and exclusions: Familiarize yourself with the specifics of your insurance plan. Understand what medical services and treatments are covered and to what extent. Identify any exclusions or limitations on certain procedures or providers. This knowledge will enable you to better anticipate and manage your medical expenses.
- Understand your financial responsibilities: Be clear about your financial obligations under the insurance plan. Know your deductible, copayment, and coinsurance amounts. Understand how these amounts vary for in-network and out-of-network providers. This information will help you predict your out-of-pocket expenses more accurately.
- Review your Explanation of Benefits (EOB): Whenever you receive medical services, you will get an EOB from your insurance company. This document outlines the costs of your services, including how much your insurance covers and your expected out-of-pocket expenses. Reviewing your EOB carefully will help you identify any discrepancies or unexpected charges.
- Stay informed about state and federal protections: Familiarize yourself with laws and protections at the state and federal levels that can shield you from certain medical bills and safeguard you from aggressive debt collection practices and negative credit reporting. Understanding your rights can provide you with leverage when navigating medical billing issues.
- Explore financial assistance programs: Many hospitals and healthcare providers offer financial assistance programs, sometimes known as "charity care." These programs provide free or discounted care to patients who meet certain income criteria. Additionally, state and federal programs like Medicaid may be available to help cover your medical expenses.
- Understand the billing process: Medical billing can be complex, with potential errors and discrepancies. Review your itemized bill thoroughly and compare it to your EOB. Look for incorrect patient information, duplicate charges, or services you didn't receive. Contact the healthcare provider's billing office to clarify any uncertainties and resolve any identified issues promptly.
- Know your appeal rights: If you disagree with the charges on your bill or the insurer's decision, you have the right to appeal. You can initiate an internal appeal with your insurance company and, if necessary, request an external review. This process can help you resolve billing disputes and potentially reduce your financial burden.
Understanding your insurance plan is a powerful tool for managing your medical expenses effectively. It empowers you to identify errors, negotiate charges, and make informed decisions about your healthcare choices. Don't hesitate to reach out to your insurance provider, patient advocacy groups, or state assistance programs for additional support in navigating your specific situation.
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Deductibles and tax
The IRS allows a medical expense deduction if you have unreimbursed expenses that are more than 7.5% of your Adjusted Gross Income (AGI). This applies to expenses not compensated by insurance or otherwise, regardless of whether you receive the reimbursement directly or payment is made on your behalf to the healthcare provider. Deductible medical expenses include:
- Fees to doctors, dentists, surgeons, chiropractors, psychiatrists, psychologists, and nontraditional medical practitioners
- Inpatient hospital care or residential nursing home care
- Acupuncture treatments
- Inpatient treatment at a centre for alcohol or drug addiction
- Amounts paid for nonprescription medicines
- Amounts paid for transportation essential to medical care, including out-of-pocket expenses for a personal car, standard mileage rate for medical expenses, tolls, parking, taxi, bus, or train fare, and ambulance costs
- Insurance premiums to cover medical or qualified long-term care
- Health insurance costs of self-employed individuals
If you pay for health insurance coverage after taxes are taken out of your paycheck, you might qualify for the medical expense deduction. If your insurance is through your employer, you can only deduct out-of-pocket premiums, provided you don't use an HSA to cover those costs. If you have insurance through an employer-sponsored plan, you can't deduct your monthly premiums but you can deduct out-of-pocket premiums, provided you don't use an HSA to cover those costs. If you can get health coverage through a spouse's plan but choose to go through the health insurance marketplace instead, you are not allowed to deduct the premiums from your taxable income.
If you have a problem with debt collection or credit reporting due to surprise medical bills, you can submit a complaint with the CFPB. Many states also provide help for consumers experiencing problems with their health insurance.
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Frequently asked questions
First, make sure that you owe the bill. You could have already paid it. It’s also possible that the provider or debt collector has confused you with someone else with a similar name. Check if the bill reflects the payment made by your insurance provider and what the provider understood would be covered. If you are unsure, talk to the accounting or billing office of your provider. You can also contact the health-care provider or the hospital and ask to negotiate.
Billing errors include being charged for the same service or treatment twice, incorrect patient, provider or insurance information, and incorrect codes for the procedures.
Financial assistance programs, sometimes called “charity care,” provide free or discounted health care to people who need help paying their medical bills. The Affordable Care Act (ACA) requires hospitals with 501(c)(3) nonprofit status to have programs to provide this care. Some states have charity care laws that also require additional free or discounted care to be provided by hospitals. Older adults can apply for the Qualified Medicare Beneficiary (QMB) program, which ensures doctors, suppliers, and other providers should not bill for services and items covered by Medicare, including deductibles, coinsurance, and copayments.
You can deduct your medical and dental expenses if they exceed 7.5% of your adjusted gross income for the year. This includes expenses not compensated by insurance or reimbursed. This deduction applies to payments for the diagnosis, cure, mitigation, treatment, or prevention of disease, or payments for treatments affecting any structure or function of the body.
