How to get out of medical debt

Healthcare costs can add up quickly, even if you have health insurance. These strategies can help you get out of medical debt — cutting the amount you owe and paying it off faster.

No one ever wants to go into debt because of a health issue such as a chronic illness or medical emergency. And yet nearly 1 in 10 adults in the United States find themselves in just that situation. About 6% of all U.S. adults owe more than $1,000 in overdue medical bills. And about 1% owe more than $10,000.

Unfortunately, medical debt can have surprising long-term effects on your life and well-being. For starters, it can damage your credit score. Beyond that, research shows that people who report problems paying medical bills also report more days of mental health symptoms.

Fortunately, it is possible to get out of medical debt. Here are some smart strategies to help you take control of medical debt and pay it off for good.

Check for billing errors

“These are unfortunately more common than people realize,” says Jenni Nolan, a board-certified patient advocate at Clear Healthcare Advocacy in Carmel, Indiana. Nolan suggests that you always compare any bills you get against your explanation of benefits statement. You get this document from your health plan. It describes what costs they will cover for your medical care. It’s generated every time a provider submits a claim.

“Just recently, my daughter got a bill for her annual gynecological exam,” says Nolan. “I was puzzled. It should automatically have been covered by her insurance, as it’s a preventive service. It turns out her doctor’s office had entered her as ‘self-pay.’”

Know your out-of-network rights

Let’s say you end up in the emergency room for a broken bone. Then later, you get a surprise medical bill for thousands of dollars. The reason: One of your providers was out of network. Fortunately, when it comes to emergency care, you may be off the hook for some or all of the cost, says Adria Gross. Gross is CEO and founder of MedWise Insurance Advocacy in Monroe, New York. 

“If a doctor is out of network and you require emergency care, they still can only charge the in-network rate,” Gross explains. The same is true if you need supplemental care, such as X-rays or anesthesia, that’s provided by an out-of-network provider at an in-network facility.

Just be aware that for certain nonemergency services, out-of-network providers or emergency facilities may ask you to sign a notice and consent form before they give you care. That will allow them to bill you for out-of-network care. You aren’t required to sign the form, though. And you shouldn’t sign it, if you don’t want to be charged for out-of-network expenses. But if you don’t sign, you may have to reschedule your care with in-network providers.

Negotiate your bill

It’s true — you can try to negotiate your bill to lower the amount you owe. Nolan suggests that you offer to pay roughly twice the Medicare reimbursement rate. You can look up the costs of certain services and procedures on the Medicare website. “This way, the hospital makes some profit. But the patient isn’t on the hook for the entire bill,” says Nolan.

See whether you qualify for financial assistance

Nonprofit hospitals must, by law, offer financial assistance programs. “Most people don’t even realize that they qualify, because most hospitals won’t volunteer that information when you call up about your bill,” says Nolan. Some state laws also require for-profit hospitals to provide uncompensated care, meaning care that they won’t get reimbursed for.

To find out what the hospital offers, ask for a copy of their financial assistance policy. You may have to fill out an application and share information about your income and expenses. Also, if your bill is past due, has it already been sent to collections? You can ask the debt collector to pause the process while you seek financial help through the hospital’s program.

You can look outside the hospital for financial help too. Groups like the Patient Advocate Foundation often give grants to patients who need financial assistance.

Consider a medical credit card

To help you pay the bill, your doctor’s office may offer you a medical credit card. These can be used only to pay for healthcare costs within a certain network of medical providers. The advantage of these cards: They usually defer interest for a period of time, such as 24 to 36 months, says Gross. But if you can’t pay off the full amount within that time period, she suggests that you avoid them.

“Otherwise, the card companies often retroactively charge you for all of the interest that’s been building up for the last couple of years, which can be a lot of money,” Gross says.

Get a medical bill advocate

“It can be really tough to navigate a maze of medical bills when you don’t know how the system works. It’s like a giant jigsaw puzzle. You need someone to help you put together the pieces,” says Gross. Medical bill advocates do that all day, every day. So they know the easiest and fastest ways to get you the maximum benefits possible.

Need help finding a medical bill advocate? If you have a digital health navigation app like Wellframe, you can ask your care advocate for a connection. Many health plans offer Wellframe as a benefit to their members at no extra cost.

Don’t know whether your health plan offers the Wellframe digital health management app? Email to your human resources department to find out.

Pay something

Even a small amount is better than nothing, says Gross: “I tell clients to pay what they can afford, even if it’s just $25 a month. Sometimes, after 2 or 5 or even 10 years, the hospital will decide that it’s just not worth the bother to send out bills anymore.” Paying something can help stop your bill from being sent to a collections agency.

Another plus: As of July 1, 2022, a medical provider or hospital must wait 12 months before submitting an overdue bill to the credit bureaus. That gives patients more time to take steps to correct or negotiate bills or to apply for financial support. And starting in July 2023, credit bureaus will also stop including any unpaid debts that are $500 or less. That will help stop small bills from unfairly ruining a person’s credit.

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