Medical debt can be one of the heaviest burdens to carry. Today, the high cost of treatment in the United States causes some to avoid receiving the treatment they desperately need. If they already have medical debt, they will be even more reluctant.
Why is medical debt such a big deal? For starters, medical debt that goes to collections can impact your credit score. That makes it more difficult to do things like get a car loan or even get approved for a property lease.
Living with Medical Debt
The good news is that medical debt doesn’t have the same amount of sting as other types of debt. Your provider can’t “repossess” the care they gave to you.
For the most part, penalties for late payment stop accruing after just one or two late fees, although this can vary depending on your agreement with providers. Most providers also can’t charge you interest unless you signed a loan-type agreement that explicitly permits them to charge you interest.
This doesn’t mean you should let medical debt sit and fester. It can still dog your credit, and it may affect your willingness to continue medical treatment.
Fortunately, those who feel strapped by medical debt have a number of good options for paying it off. Foremost, they should carefully review their charges. You want to look for billing errors, and you may find opportunities to negotiate the cost of certain charges.
Many providers offer the ability to enter payment agreements or file for a low-to-no interest loan. There’s also always the option to apply for a short term loan, which can help you pay off medical debt immediately.
Review some of your available options for paying off medical debt below, and watch out for their respective pros and cons.
Review Your Billing for Errors or Unexpected Charges
Medical billing is complicated, and that means it’s prone to errors. The more expensive your stay is, the more healthcare service providers are involved in your care, and the more individual charges you might have, the higher the chance that there are errors in your final bill.
A review by experts found that anywhere between 30% to 80% of all medical bills contain errors. A separate study by credit reporting bureau Equifax discovered that there is an average of $1,3000 in erroneous charges for hospital bills totaling $10,000 or more.
When you get your medical bills, take a close look at each item so that you can understand why you got the charge, where it came from, and why it is that amount. For instance, you may receive separate bills for the film used to take an X-ray and the radiology practice that reviewed your X-rays. Make sure that between the two, there are no redundant charges.
Ask about the hourly rate for medical analysis and diagnosis. Confirm the price of each and every drug, dressing, device, or medical product. Look for examples of something you didn’t receive, such as an over-the-counter drug, to spot charges that shouldn’t be on your bill.
If you spot an error, speak with the billing department as soon as you can. You may get someone on the phone who claims they don’t have the authority to help you. If that’s the case, ask to speak to their superior. If a superior claims they still can’t amend the charge, ask if you can have them repeat to you the reason you think the charge should be different until you’re both on crystal clear terms.
Being persistent may be nerve-wracking, but it’s important to advocate for yourself and put pressure on those who have the authority to help you lower your bill.
Negotiate the Cost of Services
When you use medical insurance, your insurer doesn’t pay the listed price your provider offers. Instead, each medical insurer negotiates prices individually, allowing them to save thousands on services compared to what the average person might pay.
Your care provider may claim that you don’t have the same ability to negotiate, but it never hurts to try. You can haggle over the cost of certain services or even products.
Since you may have no idea what a “fair” price would be, you can rely on services like the Healthcare Bluebook to give you a ballpark figure. If you bring these figures to the negotiating table, your healthcare provider may claim their charges are different for whatever reason, but at least they know that you understand what a typical price might look like.
One way to lower the cost of your healthcare bill is to offer to pay it all at once in exchange for a discount. This can be anywhere from five to 20 percent off your final bill.
If you feel like your negotiations aren’t going anywhere, you can work with a medical billing advocate from an organization like the National Patient Advocate Foundation. They may be able to connect you to a representative that will help you sort through your bills and negotiate discounts or favorable payback agreements.
Work Out a Payment Plan
Healthcare providers can put up a tough front. “Payment due at time of service,” their forms may say. Or, they may try to tell you that your only option for payment is to sign up for a medical debt credit card.
Don’t fall for it! Providers will almost never take legal action against those who don’t pay their medical bills immediately. Instead, they will sell your debt to a collection agency for pennies on the dollar. In other words, they have a strong motivation to work out a payment agreement with you rather than losing most of your balance to a collections referral.
Ask if your provider has a financial assistance department or program. You can typically schedule a meeting with that department and work out a payment plan or a zero-interest loan.
Be prepared to bring proof of your income and other financial statements that prove hardship. With these documents in hand, you may be able to convince the provider that you want to pay but need them to meet you halfway to get it done. Often, they will be willing to work with you rather than selling your debt to collections.
Apply for a Short Term Loan
Once your medical debt has been referred to a collections agency, it can be tough to negotiate. You can still work out a payment plan of sorts, but collections companies are not known for their favorable agreements.
If all else fails and you still have a strong desire to erase your medical debt quickly, you have the option of applying for a short term personal loan to pay it off all at once. These personal loans offer you quick cash even if you have bad credit. You can repay them in a few quick installments plus interest to free yourself from debt.
Just be sure to review your agreement closely, and have it underwritten alongside your income information to ensure that you will be able to repay. Consider the total cost of the loan, including interest, before signing any final agreement.
If you’re ready to learn more about your options for a short term loan, you can apply now online.