7 Ways to Manage Medical Debt

Medical Debt is one of the most common debts American’s have today. In fact, according to research by the Kaiser Family Foundation found that 52% of all debt collection actions are due to medical bills. When these bills get ignored, you risk a court case, wage garnishment, added interest to your balance, and the costs associated with the collection process – including expensive attorney fees. It is important to try to handle these types of bills and debt as early as possible to lessen the chances of negative consequences. That is why, with the help of Ashley Piland, Family and Financial Resource Manager, we’ve compiled a list of seven tips that can help you manage your medical debt.

Don’t ignore your bills

It can be easy to do, ignoring a bill. You see the name on the envelope and know what it is. A quick flip into the garbage bin and it’s forgotten. Unfortunately, it’s only forgotten by you because the medical provider knows what they sent, when the sent it, and how big the bill was. Open them. Save them. All of them (you may receive more than one for the same date of service). Keep track of them for any insurance explanation of benefits you should receive. This includes bills you receive for your child(ren).

For example. You go into the emergency room for chest pains. You may receive a bill that includes: Emergency Room fees (hospital), x-rays (hospital), the x-ray is interpreted (independent radiologist), an electrocardiogram (hospital), the electrocardiogram is interpreted (independent cardiologist), pain medication (hospital), and any fees associated with a “consult” from a specialist doctor.

Keep. Them. All.

Verify the charges on each bill

Yes, we can’t emphasize this enough. The charges on the bill should match what was done and what supplies and medications you may have received. It will also tell you how much your insurance company was billed.

In the chance that you find something you don’t remember or seems off, you can dispute the charge or ask for an explanation of the charge. There is a limited time allowed for disputes but because you aren’t ignoring the bills, this shouldn’t be a problem (right?).

Pay it off

In a perfect world, we could all just pay them off as they come in, but we realize that isn’t the case with most people. But – look into paying off the smaller ones first. When the smaller bills are paid off, this will show you aren’t trying to dodge your responsibilities and are willing to pay what you can.

And, side note, please don’t use a credit card to pay off a medical bill. The interest you pay on that credit card may be nearly seven times the interest you would pay should your bills go to collections or court.

Consolidate the smaller bills

Negotiation goes hand in hand with consolidation. Ask your medical provider to consolidate or combine all of your small bills into one lump sum (this will make the number of statements you receive a lot more manageable as well). Once you have the consolidated, get ready to negotiate.

Negotiate a Payment Arrangement or smaller pay off amount

Many medical providers will work with you to create an affordable payment plan. In some cases, you will need to negotiate what how that plan will work. There may also be some offices that can reduce your amount due to by 30%. In order to get a plan you can afford, be ready.

• Look at your budget and know what you can afford and how often you can pay that amount
• Put your game face on
• Stand firm on the amount you can afford
• Once the plan is agreed upon, get it in writing
• Again: Once the plan is agreed upon, get it in writing
• Be sure that, if it is on your credit report, they mark it paid in full

Apply for Medicaid or other Government Health Plans

In a number of cases, you may be eligible for Medicaid or the Healthy Indiana Plan (HIP). When at the hospital receiving services, ask for someone in financial or social work that can help you fill out the application right then and there.

If you are approved, most of these types of plans actually go back THREE MONTHS (the insurance community says it is “retroactive three months) and covers other medical expenses you may have had before you applied. This also is a great way to manage future medical debt.

Request Financial Hardship Forgiveness

There 2,903 non-profits in the United States and all of them have some form of hardship assistance available. To find out if you are eligible you will need to fill out an application and complete their process. Be sure to follow all of the guidelines for the application process – things like providing documents proving you have financial hardship. Once your application is reviewed, they will notify you how much of your bill they will forgive – sometimes up to 100%. Don’t be afraid to follow up on your application if a reasonable time has passed since you applied.

Taking control of your finances gives you power and managing your medical debt is one step to reaching your financial goals – so don’t give up! Remember, if you have questions or looking at working on paying down your debt, our Family & Financial Resources team is here to help you. Contact Ashley, Elaine, or Norma by calling 317-639-6106 or emailing apiland@maryrigg.org.