Orlando Harmon
Medical bills can be a financial burden, even for those with insurance. In the US, the cost of treating an illness, accident, or pregnancy can easily reach five figures, and insurance may not always cover the full amount. This has led to a rise in medical debt, which can have a significant impact on an individual's credit score and financial stability. With the increasing cost of healthcare, many people struggle to afford medical care and are forced to make difficult choices regarding their health and finances. This has sparked debates about the effectiveness of the Affordable Care Act and the role of insurance companies in protecting patients from financial strain.
| Characteristics | Values |
|---|---|
| High treatment costs | Treatment costs for a single illness, accident, or pregnancy can easily reach five figures |
| Billing mistakes | Billing errors can occur due to the complex nature of the healthcare system |
| Out-of-pocket spending | Out-of-pocket spending for insured individuals has increased by more than 50% since 2010 |
| Deductibles | In 2016, about 90% of policyholders had deductibles of at least $1,000 for individuals or $2,600 for families |
| Eligibility for assistance | Some hospitals have lowered the eligibility threshold for charity assistance, but high deductibles still pose financial challenges |
| Financial consequences | Medical debt is the most common type of debt collection and can impact credit scores and future financial opportunities |
| Discounts | Hospitals may offer discounts for prompt lump-sum payments or financial assistance for those unable to pay |
| Negotiation | It is possible to negotiate medical bills by comparing prices and arguing for a reduction if charged significantly more than other providers |
| Payment plans | Hospitals often have payment plan options, allowing patients to make affordable monthly installments |
| Generic medications | Opting for generic versions of medications can help reduce overall medical expenses |
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What You'll Learn
Hospitals may offer financial assistance or payment plans
Even with insurance, many people struggle to afford medical bills. A 2015 survey by the Robert Wood Johnson Foundation and the Harvard T.H. Chan School of Public Health found that 26% of respondents claimed that medical bills had severely impacted their finances. Furthermore, 55% of those surveyed by Amino and Ipsos Public Affairs had received a medical bill they couldn't afford.
Hospitals often offer financial assistance or payment plans to help patients manage their medical bills. Firstly, it is important to note that hospitals and medical offices will eventually turn unpaid bills over to collection agencies, so it is best not to ignore the bills. Instead, contact the hospital's billing department and inform them that you are unable to pay. Hospitals have programs to assist those who cannot pay, and even if you don't qualify for these, you may be able to arrange a payment plan that suits your budget.
The Affordable Care Act (ACA) requires hospitals to have a written Financial Assistance Policy (FAP) and a written Emergency Medical Care policy. These policies must be easily accessible, for example, on billing statements and public displays. They should include eligibility criteria, the basis for calculating charges, and how to apply for assistance. You can ask for a copy of the hospital's financial assistance policy, which they are legally required to provide for free. The application process for financial assistance varies between hospitals, and less than half of the hospitals in one study indicated that patients could be approved for financial assistance before the procedure.
Some hospitals may offer interest-free loans to patients, although this is not charity. When considering payment plans, it is important to look at the total financial assistance, payment timing, and interest rates to understand the overall financial burden. For example, a hospital may offer a lower price but require partial upfront payment and full payment within 90 days, which may force patients to take out a loan or use a credit card. On the other hand, a hospital with a higher listed price may offer a two-year, zero-interest payment plan or financial assistance to underinsured patients, making it a more financially optimal option.
Additionally, some hospitals may offer a one-time discount for paying the bill in full within 30 days. You can also compare the prices charged by nearby hospitals or doctors for the type of care you received. If you were charged significantly more, you can argue for a price reduction. If you cannot afford to pay anything, you may need to apply for Medicaid or other financial assistance programs.
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Government programs can help pay for medical care
Government programs like Medicare, Medicaid, CHIP, the ACA, and COBRA can help with health expenses. Medicare Savings Programs, for example, may be able to help with Part A and Part B premiums, deductibles, coinsurance, and copayments. To qualify for Medicaid, eligibility requirements must be met, which vary by state and depend on age, income, household size, and disability. The Children's Health Insurance Program (CHIP) provides low-cost medical help to families who do not meet the requirements for Medicaid. The Affordable Care Act (ACA) provides access to health insurance for those who have previously gone without, including those who can't access insurance through their employer.
State social services agencies provide direct assistance to people with limited access to healthcare. They can offer referrals to local health centers and organizations that may be able to help. Some states have charity care laws that require hospitals to provide free or discounted care to patients who meet the requirements, sometimes based on income. In addition, some hospitals and doctors' offices will give a one-time discount for paying a bill in one lump sum within 30 days.
Nonprofit organizations also provide assistance with medical bills. The HealthWell Foundation, for example, offers the underinsured access to quality care and provides financial assistance for prescription copays, health insurance premiums, and deductibles. The Patient Action Network (PAN) supplies underinsured people battling life-threatening, rare, and chronic diseases with the funds they need to pay for their care.
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You can dispute a medical bill with a debt collector
Medical bills can be extremely expensive, and even with insurance, many people are unable to afford them. In the US, the treatment costs of a single illness, accident, or pregnancy can easily reach five figures. This can be extremely overwhelming, and it is tempting to ignore the bills. However, this is one of the worst things you can do, as the unpaid bills will be sent to collections, and your credit score will take a hit.
If you are contacted by a debt collector about a medical bill, you can take the following steps:
- Ask the debt collector to verify the debt and provide information about the collector and the bill.
- By law, the debt collector must stop all collection attempts and send you additional information about the debt, such as the original invoice, as well as a response date.
- If the collector reports the debt to a credit bureau, the report should show that you are disputing it.
- If you do not dispute the debt within 30 days of receiving the verification letter, the collection agency will assume the debt is valid.
- If your bill is improperly characterized, contact the credit bureau and the debt collection agency and ask them to correct the error. If they refuse, file a notice with the CFPB.
- If you receive a notice in the mail or by email, scour it for details and contact the company for any missing information.
- If your bill is already in collections, your provider or facility must stop pursuing payment until the dispute process is resolved.
- If your provider charged at least $400 more than your good faith estimate, you may be eligible to dispute your bill through the patient-provider dispute resolution process. An independent third party will review your bill and determine an appropriate payment.
- If you didn't use health insurance, you can review financial assistance guides for ways to reduce your bill. You can also submit a complaint if your provider didn't give you a good faith estimate.
- If you used health insurance, you don't qualify to dispute a bill, but you can submit a complaint if you received an out-of-network bill for a visit to the emergency room or an in-network facility, or if you already paid more than in-network rates.
- If you think this decision violates the No Surprises Act, appeal your bill by following the process described in your plan's documents and denial notices.
- If you are not able to afford the bill, talk to the medical care provider. Nonprofit hospitals are required by law to offer financial assistance programs, and other providers may be willing to work out payment arrangements.
- Contact your state or local social services to see if more help is available.
Remember, debt collectors can only contact you about valid debts that you owe. They must comply with the laws that apply to debt collection and cannot harass or abuse you during their collection attempts.
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Ask for an itemized bill to check for errors
Even with insurance, medical bills can be unaffordable. In fact, a 2015 poll by the Robert Wood Johnson Foundation and the Harvard T.H. Chan School of Public Health found that 26% of respondents claimed that medical bills had a severely negative impact on their finances. It is therefore important to be proactive in dealing with medical bills.
One way to do this is to ask for an itemized bill to check for errors. An itemized bill is a detailed breakdown of all the individual charges associated with a patient's medical care. It includes service dates, revenue codes, and the quantity and charges for each procedure. Importantly, hospitals are legally required to provide you with an itemized bill within 30 days of your request.
When reviewing your itemized bill, be on the lookout for common billing errors, such as duplicate charges, charges for services or medications you didn't receive, inaccurate prices, or discrepancies between the billed charges and the average costs in your area. If you find any mistakes, contact the billing department to have them corrected before negotiating the remaining charges.
In addition to checking for errors, you can also use the itemized bill to negotiate the price of the bill. Compare the charges on the itemized bill to the hospital's listed prices and research the typical costs for the services you received. If you believe the charges are unfair or unreasonable, contact the billing department and politely explain your concerns. Be prepared to offer a reasonable counterproposal based on your research and financial situation.
Remember, it is important not to ignore your medical bills, as this can lead to negative consequences for your credit score. Instead, be proactive and take the necessary steps to understand and address your medical expenses.
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Negotiate the total cost and discuss what you can pay
Even with insurance, many people struggle to afford medical bills. Medical debt is the most common type of debt collection found on consumers' credit reports. It is important to be proactive in dealing with medical bills to avoid medical bankruptcy.
If you receive a bill that is too expensive, you can negotiate with the hospital or healthcare provider's billing department. Billing offices are used to negotiating, so don't hesitate to ask for a reduced fee. You can also ask for a payment plan, even if you can't get a reduced cost. When negotiating, it is important to be well-researched. You can use tools like FAIR Health Consumer and Healthcare Bluebook to determine the average price of a procedure in your area and whether you have been overcharged. If you have been overcharged, you can ask the billing department to honour the average price.
If you are uninsured, you will usually be charged the master rate, or the maximum that the hospital would charge for a particular procedure. In this case, you can ask to pay the Medicare rate, which healthcare providers are familiar with.
If you are unable to negotiate the total cost of your bill, you can still request a payment plan. Be careful to ensure that the monthly payments are ones you can afford. It is always better to negotiate directly with the healthcare provider than to put your medical bills on a credit card, as you will get lower interest rates.
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Frequently asked questions
First, make sure that you actually owe the bill. You could have already paid it or the provider may have confused you with someone else. Next, check that the provider has accurately calculated the bill. Then, if you are insured, check if the law bans certain practices, like requiring you to pay out-of-network charges for emergency services. If you are still unable to pay, contact the hospital billing department and ask about financial assistance or a payment plan.
Financial assistance, sometimes called "charity care", provides free or discounted health care to people who need help paying their medical bills. Ask your health care facility's billing department about financial assistance and follow their instructions to apply. Nonprofit hospitals must give financial assistance to eligible patients who can't afford to pay.
There are public programs and private organizations that may be able to help you tackle your medical bills. These include government health insurance programs, debt management plans, and medical bill advocates. You can also try negotiating with your provider to reduce the amount you owe or set up a payment plan.
