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How to Negotiate Medical, Hospital Bills

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The average American household spends more than $5,000 annually on health care, according to the Bureau of Labor Statistics, and you might feel like you have to pay exactly what your medical provider or insurer says.

Fortunately, negotiating medical and hospital bills is possible, whether through seeking financial assistance or enrolling in a gradual repayment plan, among other strategies.

And even if you can’t negotiate medical bills to a lower amount or eliminate them completely, there are ways to pay this debt in full, without a delinquency hitting your credit report.

How to negotiate medical bills

Try negotiating before treatment

Shop around to find cheaper providers before your service

Understand what your insurance covers ─ and what it doesn’t

Request an itemized bill and check for errors

Seek payment assistance programs

Offer to pay upfront for a discount

Enroll in a payment plan

1. Try negotiating before treatment

Under certain circumstances, say an emergency room visit, you’re not going to have much say in the cost of your treatment. But if you’re getting a planned surgery or procedure, then it’s possible to negotiate your medical bills before you undergo treatment.

  • Get in touch with the hospital’s billing department to get an estimate of how much your procedure will cost.
  • Present this information to your insurance provider to get an estimate of what your plan will cover.
  • Once you know how much you’ll be responsible for, have a candid conversation with your hospital’s billing department to let them know how much you can afford.
  • The billing department may recommend setting up a payment plan or applying for payment assistance programs, depending on your situation.

Don’t be afraid to ask questions like, “Is this procedure necessary?” or “How much will it cost?” After all, hospital procedures are still transactional, and you are the customer. You should know if your treatment will eventually leave you thinking about medical debt consolidation.

Call your health care provider rather than email them. It’s much more efficient to negotiate medical bills over the phone than over email. Make sure you write down the time and date of your phone call, as well as the name of any representatives you speak with.

2. Shop around to find cheaper providers before your service

It’s common for insurance companies to offer cost estimates for services. Some companies, like UnitedHealthcare and BlueCross BlueShield, offer cost comparison tools to help you find the best price on a service you need.

If your insurance provider doesn’t offer this service, you could try a third-party website, like Healthcare Bluebook and GoodRx. These free tools allow you to compare the cost of treatment and prescription medicines.

Cost should never be the top consideration when deciding where to go for health care services.

3. Understand what your insurance covers ─ and what it doesn’t

To properly review your health care bills, you should know what is and is not covered under your insurance policy. Without this information, you won’t know how to negotiate a hospital bill.

Request a Summary of Benefits and Coverage from your health insurance company to find out where you stand when it comes to coinsurance, deductibles and more.

You can use this table as a reference to better understand your insurance coverage:

4. Request an itemized bill and check for errors

After your care, you’ll receive an Explanation of Benefits (EOB) from your insurance company and a statement from your health care provider. An EOB is not a bill, and it may be updated as your claim is processed. Never pay an EOB without receiving a bill from your provider and without reviewing it for errors.

Before your treatment, make sure all labs, anesthesiologists and other ancillary services that your provider uses are in-network. Some states prohibit out-of-network providers from charging out-of-network rates when performing care in an in-network setting. Learn more about your state’s level of protection via The Commonwealth Fund.

5. Seek payment assistance programs

Check with your health care provider (meaning the hospital’s or lab’s billing department) to ask about any financial assistance and charity programs they offer. Hospitals have a standard procedure for helping people who can’t pay their bills. Some hospitals even have an uninsured discount for patients who don’t have adequate access to medical insurance.

If you’re uninsured and can’t imagine being able to afford your dues even with assistance, ask your provider about the possibility of medical debt forgiveness. Just be prepared to hand over proof that you really can’t afford what’s owed. Documents like tax returns and personal letters are a starting point.

USA.gov recommends contacting your state or local social services agencies to see if you qualify for health care assistance relevant to your area. If you’re coming up short, or simply want someone to go to bat for you, consider the resources of organizations like the Patient Advocate Foundation or the PAN Foundation.

6. Offer to pay upfront for a discount

This option won’t be available to everyone, but if you have the funds to pay most of your medical bill upfront, try to make a deal. Call up the billing department and offer to pay most of the bill immediately. Consumer Reports estimated that you could save 20% off your bill using this method.

Ask to speak with someone at the billing department who will have the authority to be able to cut you a deal. Write detailed notes of all your calls, including who you spoke with and when.

7. Enroll in a payment plan

Health care providers typically offer no-interest repayment plans so they can recover the cost of services from patients over time instead of in one lump sum. Often, these programs are offered to anyone who needs them (and are a better alternative to medical loans), so you won’t have to meet certain eligibility requirements like you would with payment assistance programs.

It’s important that you don’t agree to a payment plan that you can’t afford to stick with. If you are unable to make the monthly payments, then your hospital bill may be sent off to a collections agency. Instead of trying to negotiate bills in collections, speak with the hospital’s billing department first.

How to pay for medical bills

Use your FSA or HSA

Through your health insurance provider or employer, you may have a health savings account (HSA) or a health care flexible spending account (FSA) that you can use to pay outstanding medical bills.

Both an HSA and FSA accounts have tax advantages that essentially mean you get discounted care when you use them to pay for medical services. However, if you don’t already have one of these accounts, then you certainly won’t be paying for your medical bills with this type of funding.

Pay medical bills with a credit card

This can be done, but keep in mind that you’ll more than likely be paying interest on top of your hospital bills if you go this route. According to LendingTree data, the average APR offered with a new credit card was 19.41% as of May 7, 2021.

However, there are a few strategies you can apply to pay no interest on your medical bills, even using a credit card.

  • Medical credit cards, like CareCredit and the AccessOne MedCard, offer special 0% interest financing lasting a set amount of time (such as 12 or 24 months, depending on the purchase). If you can’t pay off the purchase within this time frame, you may qualify for reduced-interest financing ─ or else you’re subject to sky-high interest rates and back-interest.
  • A credit card with an introductory 0% APR period is another option, if you have good to excellent credit. Repay your balance during the introductory period to avoid interest charges on your purchase. These no-interest periods typically last up to 18 months, which could give you a good cushion for paying back medical debt.

Not everyone will qualify for a credit card that has a zero-interest introductory period, especially applicants with lower credit scores. Another downside: If you don’t pay off the balance within the promotional period, you may have to pay interest on your purchases dating back to the time you charged the credit card.

Refinance your debt with a personal loan

You could also consider paying off your medical bills using a personal loan. A personal loan is an unsecured loan that can be used to pay for nearly anything, including medical bills. Consider the pros and cons of this financing option in the table below:

If you have equity in your home or a 401(k), you could also consider taking out a home equity loan, home equity line of credit or 401(k) loan. These options may offer lower APRs, but it also means that you’ll use your home or your retirement account as collateral.

File for bankruptcy

Two-thirds of people who claim bankruptcy do so because of overwhelming medical bills, according to a 2019 article published in the American Journal of Public Health,

This option should be a last resort for people who owe a significant amount of medical debt. But for some consumers, filing for bankruptcy is the right choice when faced with burdensome medical bills with no way to pay them back.

Filing for bankruptcy is a complicated decision, so make sure to weigh bankruptcy pros and cons, and speak with a financial professional before you take this step.

Refusing to repay your medical bills

Unfortunately, you can’t really decide not to pay for a service based on principle.

When you have an unpaid medical debt, your creditor will send your bill to collections. The immediate result of that is a ding on your credit profile. If you still don’t pay, you can be sued by the debt collector or service provider, which means that you’ll likely have to hire an attorney (optional) and go to court. If you’re found liable for the debt, the court may issue an order to garnish your wages.

So unless you’re interested in being consumed by a civil court lawsuit, ignoring “payment due” notices isn’t a realistic option. Do your best to learn how to negotiate medical bills and take care of them before they add to your hurt.

 

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