A study done at Harvard University indicates that this is the biggest cause of bankruptcy, representing 62% of all personal bankruptcies. One of the interesting caveats of this study shows that 78% of filers had some form of health insurance, thus bucking the myth that medical bills affect only the uninsured. Serious illness or injuries can easily result in hundreds of thousands of dollars in out-of-pocket costs to you.
What can you do to help you and your family?
Make sure the charges are accurate
Almost half of all medical bills
are believed to include errors.
Check every charge
.
If it looks like your bill includes duplicate charges, procedures you’re not sure occurred, or anything else that seems suspicious, call and ask.
Don’t use credit cards to pay off your medical bills, instead, work out an interest-free payment plan
There’s more room to negotiate medical bill payments unlike some other debts. As long as you pay something, and set up a payment plan you can get by making smaller payments for a while.
Medical payments also come with low or no interest
, which is definitely not true of most other debts. Depending on the hospital or doctor’s office, the amount you pay each month may be negotiable. They’ll start out with a number that may be too much for you. Don’t be afraid to talk them down.
Ask for a prompt pay discount
Some hospitals and doctor’s offices will give you a one-time discount for paying your bill in one lump sum within 30 days.
Ten percent is customary but some experts suggest asking for even more of a discount
.
You can get some ammunition for your argument by using the
Healthcare Blue Book
to see what other nearby hospitals or doctors charge for the type of care you received. If you were charged significantly more, you can argue you deserve a price reduction.
If you can’t afford to pay anything at all, apply for financial assistance
H
ospitals do offer financial assistance, but each has its own procedure. At some, you have to apply for
Medicaid
first (you may be eligible if you are under 26 and earn less than $15,856). If you’re rejected, then you apply for help from the hospital.
How To Deal With Collection Agencies
If the worst has happened, and your bills have gone to a collections agency, you need to know your rights.
Know what collectors are not allowed to do:
- Call you at work if you’ve asked them not to
- Call late at night
- Threaten to sue you without significant reason
- Tell you that you have committed a crime by not paying
- Threaten to tell others about your debt (except for your Lawyer or spouse)
Record any phone calls and get everything in writing
Talking with debt collectors can get heated quickly, but they aren’t allowed to threaten you. If they do, you have reason to sue. So make sure to record your phone calls with any debt collectors that contact you.
Once you’ve come to an agreement on what you can pay, make sure you get it in writing. Don’t make any payments until you have the physical document.
Also, keep all proof of payment—that way, if there’s ever a question about your debt you can prove that you paid what you said you would.
Offer to pay something
Obviously debt collectors want to get the full debt paid, but be firm and offer to pay what you can. It’s likely that they’ll accept it.
You should expect a counteroffer…or a couple of them. That, after all, is what debt collectors are supposed to do. If you can pay off the debt in full, this will look much better on your credit report, but chances are you can’t—which is how you got in the situation in the first place. Just offer to pay what you can.
