Families with medical debt say the debt undercut their ability to save and afford basic household needs, they found.
To help avoid these types of consequences, follow these tips to tackle medical debt head on:
Ask for a detailed billing statement and check for errors
You may receive a billing statement from your insurer or medical provider, but it may not give the full picture of services you received. Request a detailed, line item statement and review it carefully for any errors. It’s possible you could have received treatment from an out-of-network doctor without your knowledge. Or, there may be duplicate charges or charges for care you didn’t receive. If you find errors, contact the provider directly and have them corrected and a new statement sent.
Negotiate with your medical provider directly
You might be able to negotiate down your medical debt or arrange a payment plan with the medical provider, whether it’s your doctor’s office, a hospital, or your insurer. Along the way, keep careful records of who you talk to and what was said. Here’s a step by step guide on how to negotiate a medical bill with a health insurance company.
Negotiate a Settlement with a Collection Agency
Past-due medical debt eventually gets charged off and sold to a collection agency. But that doesn’t mean your window to negotiate has totally closed. If you have access to enough cash, ask if you can settle the debt for a lesser amount and forgive the remaining balance. Just be aware that forgiven debts can be treated as taxable income in some cases.
Seek help from a medical billing advocate
If you’ve been unsuccessful in trying to negotiate down your medical debt, the debt has significantly damaged your credit, or you are on the brink of filing bankruptcy, consider reaching out to a medical billing advocate. (Don’t confuse these advocates with debt settlement or repair firms, which should be treated with caution.)
You can find a medical billing advocate through the National Association of Healthcare Advocacy Consultants or the Alliance of Claims Assistance Professionals. These services aren’t free and whether or not it makes financial sense to hire a pro depends on how money you stand to save by lowering your debts. Advocates typically charge either a flat fee or a percentage of your savings.
Look for a charitable foundation that can help
You may want to consider reaching out to a nonprofit for assistance. If you were diagnosed with a particular condition look toward organizations such as the Lupus Foundation of America for individuals with Lupus or the American Kidney Fund for those with kidney disease. You can also apply for grants from nonprofits that provide more general assistance such as the Patient Access Network and the HealthWell Foundation which may be able to grant funds towards medication assistance or other medical costs. With these foundations, limits for assistance may depend on your diagnosis and other factors.
Try a 0% APR Credit Card
If your bill isn’t overwhelmingly large you could try paying the debt off with a credit card with an introductory 0% interest period. Before you apply, make sure you’ll be able pay off the balance before the 0% interest introductory period expires.
Pay off medical debt with a personal loan
If you’ve been unable to negotiate or you are struggling to find a 0% APR credit card deal, a personal loan may be another option. Depending on your credit history, rates on personal loans range from 4.7 percent to 36 percent. We’ve pulled together a list of six great personal loan options here.
Consider bankruptcy as a last resort
If the debt is more than 50 percent of your annual income, bankruptcy might be a viable move to make. Let the hospital know you’re considering bankruptcy first, as they may then be open to negotiation. Be aware the filing bankruptcy can adversely impact your credit for years after the fact.
MagnifyMoney is a price comparison and financial education website, founded by former bankers who use their knowledge of how the systems works to help you save money.