No one plans to be sick or injured, and it is especially difficult in this climate to pay big medical bills on a limited income. Unexpected medical payments are stressful at the best of times, and when received alongside several seemingly more urgent bills it is tempting to either pay it in full to make it go away or bury it under other bills to pay later. Here are some top tips for how to deal with unexpected medical payments.
The most important thing is not to put the bill to one side and forget about it: call and talk to them early and as often as needed. Don’t let the bill go to collections, if it goes unpaid for too long and gets sent to a collection agency it is counted as “debt” and reported to credit bureaus, thereby showing up on your credit score and making it much harder for you to get a loan. It can stay on your credit report for years even after you pay it off. Any appeals that you can or must fill out should be done as soon as possible. If you are treated for something which your insurance is supposed to cover your insurance company may deny your claim, leaving you with the bill. You have to file an appeal within a specified timeframe to avoid this otherwise; you will be left with the full cost. So you should file well ahead of the deadline. It may even be possible to haggle over the bill by offering to pay in full for a discounted price.
Get it in Writing
When it is difficult to talk over the phone, especially if the clinic you’re contacting is poorly staffed or closed over a certain time period, it is helpful to write a letter addressed to the individual responsible for your care explaining your financial situation and asking for the bill to be waived in exchange for paying full price. You should combine this with a copy of your explanation of benefits to remind them that your insurance has covered the majority of the bill. If they are unwilling to waive it the first time you can offer to pay the balance in monthly installments, and it is best to come to them with a suggested figure after calculating your finances. If you’re covered under the Affordable Care Act (aka Obamacare) you can apply for a “hardship exemption” on healthcare.gov to avoid paying health insurance or a fee for a period of months. The higher the bill, the harder it is to get waived and you should do your research to check whether you may be facing bankruptcy.
Do your research
If you compare the cost of the procedure with an average cost for the same procedure in the area (e.g. Healthcare bluebook) you may be in a better negotiating position. Check for common billing mistakes such as double charging and charging for services that weren’t received. If you’re already in significant debt or have a poor credit history/rating, you may find it difficult to secure even a small loan to cover the cost a bill and prevent yourself falling further into debt. It is generally better to avoid getting deeper into a debt cycle, but if you do decide to do so the main thing to remember is to avoid collateralizing your home in order to secure a loan. Doing so is extremely risky, especially if you’re already deep in debt, and could lead to you losing your home. There are loans specifically designed for people with bad credit history, such as online at PrettyPenny.co.nz/bad-credit-loans/ and certain religious organizations (many are tied to the three major Abrahamic faiths) may also extend 0% interest loans to followers or members of their congregation in times of hardship.
Getting legal help or consulting an advisor
If the situation is sufficiently serious, consider consulting or hiring a lawyer. An attorney who specializes in bankruptcies can help you explore alternative options such as negotiated settlements or a bankruptcy. They can also help shield you from providers suing to collect or levy additional fees.
In finance as in health, prevention is the best cure. Make sure you are familiar with your insurance policy ahead of time to make sure you know what type of fees you can expect to have to pay for. If you’re changing insurance provider, consider talking to both companies and asking each what services they can provide that the other can’t. If you are uninsured you should check if you’re qualified for insurance under the Affordable Care Act on healthcare.gov and finally, if you are facing general problems with debt consider re-examining your household budget or consulting an accountant.
Danielle Walsh is a personal finance consultant who shares her knowledge on a wide range of financial topics on a wide range of websites and blogs.