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Juggling Medical Debt

Americans are juggling medical debt and turning to credit cards to pay their health care bills. A recent study released by the Commonwealth Fund has found that nearly 79 million adults in the United States are struggling to pay medical bills or have medical bill problems.

If you’ve been hit with an unexpected medical bill, follow some of these helpful tips to cope with paying them:

Everything is negotiable. You may be able to get a portion of the bill reduced. A hospital bill typically includes items for surgery, anesthesiology, medications, X-rays and other expenses. Contact information for each should be included on the bill. Try talking to the service providers to see if they will reduce their fees in any way.

Payment plans. If you can’t pay the entire balance at once (and many people can’t), work out a payment plan with the doctor or hospital. Most charge no interest for payment plans. Make sure the plan is realistic and based on your ability to pay. Stick to the plan. If your circumstances change, negotiate different arrangements with the provider. Remember, if it is not in writing then it is not real – ask the provider to send you written confirmation of the terms so you have proof.

Charity begins at the hospital. The majority of hospitals across the country, especially nonprofit hospitals, have charity care programs that pick up all or part of the cost of care for poor or special needs families. Some hospitals restrict financial aid to uninsured but may offer discounted services to those that are insured with limited incomes. These programs are poorly publicized in hospitals so you must actively seek them out – don’t be embarrassed to ask. Hospitals have financial counselors and patient advocates who may be able to offer advice.

Accurate billing. Review the bill. Hospital bills often arrive several weeks after your visit and may be several pages long. Don’t put it aside for later. Go through the charges. Are they accurate? Billing disputes should be resolved before paying any medical expenses.

Collection agency calls. Don’t ignore them. If your account has gone to a collection agency, you have already received a written notice in the mail. Avoiding the collector will only make matters worse and damage your credit report. If you cannot pay, say so. It is worth an attempt to contact the provider and work out payment arrangements.

Read the fine print. If you have health insurance, pay attention to the details of what’s covered beyond the office visit co-pays, like any limits or caps, deductibles, and what services are or aren’t covered to be sure you are not overcharged.

Denial of service. A medical provider may ask you to pay all or some of your outstanding balance before you can make another appointment. This may be less likely to occur if you have been in touch with them and followed through on repayment plans in the past. Plead your case directly to your doctor if you have a longstanding relationship. Either way, if you have a medical emergency, a hospital must treat you regardless of your ability to pay.

Local assistance programs. Your state or local government may have assistance programs that can help offset medical costs. Call your city, county, social service agency or community organizations.

Credit reports. Medical bills are not typically reported unless they become delinquent and are assigned to collections. On the other hand, payments on credit cards, installment loans and lines of credit are all reported to the credit bureaus. Working out a payment plan with the doctor or hospital may be a better option if you’re concerned about financed medical services lowering your credit score.

We cannot say it enough. Budget. Budget. Budget. Everyone should have a family budget and have money set aside in an emergency fund. We advise to save three months’ worth of living expenses in case you are unable to work or are hit with an unexpected bill.

Support groups. Connect with local support groups and charities. Members of cancer, diabetes, autism or other illness support groups may prove a valuable resource base for finding doctors as well as navigating the complex health care system.

A little help from your friends. Medical bills can be complicated as can figuring out the best payment options for your family budget. If you’re facing a medical crisis, you may not have the time or energy to deal with the fine details. Ask a family member or trusted friend to help. Because of patient privacy rules you should provide written permission to discuss details of your bill with the hospital or doctor.

Nonprofit credit counselors. Contact one of our certified credit counselors, they will help you sort through the bills and draft a payment plan that works for your family budget.

Published Aug 30, 2008.