If you have medical debt and you’re worried about it going to debt collection, or even if your medical bills aren’t at the debt collector stage and you’re still seeking medical treatment and working with health insurance, we can teach you how to crush your medical debt.
Paying for medical bills is a hard thing for many people, and there are ways you should pay off a medical bill and ways you shouldn’t. Never go into debt with credit cards and personal loans to pay off a medical bill. Instead, follow the advice below.
Try These Steps And Save Thousands
Ask For Documentation and Do Your Research: Three Steps
For all medical bills, no matter what, you need to call the billing office and request an itemized bill that includes the CPT codes. These codes are the universal codes that medical institutions assign to each procedure, everything from checking blood pressure to giving a vaccine to having surgery.
Once you get these codes, you can go online and investigate how much Medicare is willing to pay for each one of these procedures. Do this for each one of the codes, and then and only then should you go to the medical provider’s billing office and negotiate a deal. Tell them what you found and what you would be willing to pay.
Step 1: Request Itemized Bill with CPT Codes
Step 2: Research Medicare’s Price for Each Code
Step 3: Go to the Medical Provider’s Billing Department with Your Findings
Billing offices are trained to push back on you, but don’t be intimidated. This is, by far, the number one best way to lower the amount of medical debt that you owe.
Ask to Pay a Percentage
If you’re told your income is too high to qualify for Medicaid or hospital financial assistance programs, consider asking the billing department for a deep discount if you pay right away. You could say something like, “If I pay 30% right now, will you write off the rest?” Investopedia.com reports that this strategy can work because the provider saves time and money if they don’t have to spend months or years chasing you for payment.
Paying your medical expenses as a lump sum could save you thousands down the line. The medical debt that could be piling up for years could be resolved quickly if you make a small payment upfront.
Ask For a Discount If You Give a Down Payment
If you have the resources, another idea is to ask for a 25% discount off the total bill if you make a large down payment and plan to pay the remainder with an interest-free payment plan.
At the end of the day, most of us don’t have tens of thousands of dollars lying around to be able to pay off a big bill. Again, please remember to always ask the provider to give you the lower price Medicare pays.
- Google what Medicare pays for the services (CPT codes) you received.
- Call the billing department
- Offer to pay the Medicare rate.
Medicare prices may be tens of thousands of dollars less than providers’ retail (sticker) prices but, as they say, a little bit of something is better than all of nothing. Paying Medicare rates for medical care may mean the difference between being able to make regular payments versus having to claim bankruptcy.
Also, whether or not you get an agreement for a lower bill, always ask for an interest-free payment plan that fits your budget. Whatever payment agreement you get, make sure it’s put in writing and sent to you for your records.
Once all services have been billed and insurance applied correctly, and you’ve contacted the provider to make an interest-free payment plan you can afford.
Never Go Into More Debt to Pay Medical Bills
Of course, not everyone has the money to make a lump sum payment, or to make a down payment on their health care expenses. But that doesn’t mean you should go into more debt to pay your medical bills. Never put payments on credit cards, take out loans or sell your home to pay medical bills.
Many Americans feel embarrassed when they have medical debt and don’t understand that they didn’t do anything wrong and it’s not their fault they can’t pay medical bills.
So, we tend to rush to get rid of medical bills by transferring what we owe hospitals and providers to credit cards, thinking we can more easily pay them off over time this way.
This causes two problems:
- High-interest rate credit cards grow the debt out of control very quickly, which makes it much harder to pay off.
- When you put medical debt on a credit card, you lose the special legal protections you’re given for medical debt.
Federal laws block credit bureaus from putting medical debt on your credit report unless it’s been past due for 6 months. Also, any medical debt reported to credit bureaus is weighted differently than credit card debt, so medical debt is not as damaging to your credit score. And, most importantly, once you put the hospital bill on a credit card, the hospital has no incentive to negotiate with you for a lower bill or a more financially comfortable payment plan.
We don’t advise you to ignore your medical bills. Just please remember that transferring medical bills to bank and personal loans, payday loans, and/or credit cards is not the answer. Also, don’t take money from your retirement accounts; they’re protected from bankruptcy by federal law.
Medical debt isn’t as urgent as your other bills. Pay your mortgage, car payments, and credit cards first: prioritize protecting your home, your ability to get to and from work, and paying off high-interest debt.
Talk with the billing department to work out an interest-free payment plan you can afford. By the way, payment plans with a hospital do not show up on your credit report. And never miss that payment!