How to Negotiate Your Medical Bills and Pay Less

One slip on icy stairs or a minor traffic accident can cost thousands of dollars if you're injured. You'll want to negotiate medical bills if you're under-insured or uninsured; otherwise, an incident that happened in a few seconds can take years to pay off. These tips will help with negotiating payments and finding payment options that work for you. Don't ignore your medical bills. U.S. News reports that approximately one-third of consumer debt in collection status is related to medical expenses.

Negotiate Medical Bills: Be Proactive

  • Gather your medical bills, insurance payments information and your records of amounts you've paid. Keep a notepad handy for documenting conversations with bill collectors and medical billing offices. Always take notes during calls and verify the name of the companies and people you speak with. Note the date and time of each call you make or receive in regard to your medical bills and insurance benefits.
  • Verify payments made by your health insurance company. Billing errors, coding issues and other problems cause your medical accounts to go delinquent.
  • Determine how much you can pay immediately. Review your income and current obligations to see if you have money to pay toward your medical bills. Knowing what's available can help avoid negotiating payment amounts that you can't afford. Be prepared to document your income and obligations when negotiating payments of large sums.
  • In situations where you have no insurance, contact the health care facilities and providers directly. In some cases, you'll need to negotiate repayment before receiving treatment, but most hospitals will accept a down payment and work out payment arrangements. If you were in an accident or other situation where you received emergency care, discuss repayment options as soon as you are well enough to do so. Advise accounts receivable departments for your doctors, hospital and other care providers of your financial situation and offer to make installment payments. Keep in mind that you may have several bills to pay over many months.
  • Always be honest about your finances. Don't promise payments you can't afford to pay. Hospitals may have social workers or other staff that can help you find payment assistance if you are uninsured. Such assistance may have maximum income limits or other requirements, but you won't know your options until you ask.
  • Discuss collection policies. Medical practices may send your medical bills to collections after a certain amount of time. When you negotiate your medical bills, always ask how long before your account will be sent to collections. Ask if you can make a written repayment agreement that will keep your account out of collections until it's paid in full. When medical bills are sent to collection agencies, they are typically reported to credit bureaus and can stay on your credit reports for up to seven years. Addressing collection policies early can prevent surprises later.

Negotiation Fail: Alternative Solutions

If you can't meet repayment terms required by health care providers, options may be available. Depending on your financial circumstances, one or more of the following solutions may help:

Medical loan

You may qualify for a medical loan to cover all or part of your medical bills. Compare multiple loan quotes to find your best loan offer. Lenders may group medical loans under "personal loans." Personal loans typically don't require collateral and are repaid in consistent installments over a specified amount of time.

Personal line of credit

This is a type of medical loan offered as a line of credit. You pay interest only on amounts used. Personal lines of credit are repaid over time and typically carry variable rates. This option can be helpful if you expect to pay installments over time.

Credit cards

Manage your use of credit cards for paying medical bills carefully, as interest rates and cash advance fees can add to your debt. If your medical bills are nearing collection status, it can be worthwhile to make payments with a credit card. Keep track of rates and fees and consider transferring credit card balances to new accounts with no or low introductory rates if necessary.

Consumer credit counseling

If you owe large amounts on medical bills, a consumer credit counseling service may be able to help. Costs vary by agency and your financial situation, so it's important to shop around. HUD approved housing and credit counseling services can provide information and counseling based on your situation. Credit counseling agencies can usually negotiate lower payments for the types of accounts they handle.

Always act quickly to pay or negotiate medical bills, as additional fees and costs can quickly accrue if you don't promptly pay or negotiate repayment terms.

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