The hospital bill arrives in the mail, and youâre tempted to throw it away (again) without opening it. After all, you donât have the money to pay for that trip you took to the emergency room.
Ignoring medical bills isnât going to make them go away, and the longer you wait â much like the cough that turned into pneumonia â the worse itâs going to get. But there is some good news: You can negotiate medical bills so that you pay a fraction of the amount you were charged.
Itâs probably of small comfort, but youâre not the only one facing steep medical costs. In 2019, a quarter of adults skipped medical care, such as a visit to a doctor or dentist, because they couldnât afford it, according to a Federal Reserve 2020 report. And 18% of those respondents had unpaid medical debt of their own or from a family member.
Those expenses arenât limited to the uninsured â with co-pays and deductibles reaching four-figures, even people with insurance can face medical bills they canât afford.
Craig Antico and Robert Goff, authors of the book âEnd Medical Debt: Curing Americaâs $1 Trillion Unpayable Healthcare Debt,â spoke with The Penny Hoarder about how to negotiate medical bills you canât afford and how to pay them off before they do more harm to your finances.
How to Negotiate Medical Bills That You Canât Afford
As hard as it may be to believe, healthcare institutions arenât out to intimidate you and take all your money. At least, not in the beginning. And almost all of them will accept less than the full amount owed.
âIf you say something up front, you can generally work out an arrangement at a lower rate,â Goff said. âIf you donât, then the full maximum amount is pursued â and itâs pursued aggressively.â
As many as 80% of medical bills contain errors, so you should make correcting billing errors your first priority. Then follow these step-by-step strategies.
1. Stop Procrastinating
First of all, you need to open the envelope. Seriously. We understand that itâs easy to get overwhelmed after a medical crisis, but the clock is already working against you.
Even if you walked out of the hospital without speaking to someone about your financial situation, you still have a window of time during which you can plead your case, according to Antico, co-founder of the national charity R.I.P Medical Debt.
âTheyâve got about three or four months to talk to the hospital,â he said. âAs soon as they get a bill from the hospital, a light has to go on that I must read this bill, as hard as itâs going to be.â
First, understand if this is a bill from your health provider or health insurance company. Health insurance companies may send scary-looking statements that indicate how much they paid and how much is still owed, but that amount is not necessarily how much you have to pay.
Itâs best to reach out to your healthcare provider and ask them how much you still owe. You can also request an itemized bill. If you still donât understand what youâre looking at, make them explain each charge in detail â you have the right to demand to know what youâre paying for.
2. Ask for Help (the Earlier the Better)
Youâll have a greater chance of obtaining financial assistance if you ask earlier rather than later â especially if youâre already struggling financially. If you owe a hospital money, check its website for its financial assistance policy to find out if you qualify for a discount or charity care.
âThey can switch a bill from being billed to charity care within the first 90 days,â Antico said. âEven if you make more than two to three times the poverty level, theyâll give you a discount.â
3. Calculate What You Can Afford
Setting a goal to pay off medical bills rather than avoiding them is the best way to help your financial situation long-term.
But when facing a bill â or pile of bills â that seems insurmountable, itâs easy to panic and whip out your credit card to make it all go away. Thatâs a big mistake, since there are alternatives to handling medical debt that donât involve the double-digit interest rates that credit cards charge.
Instead, plan your payoff in a responsible way by determining how much you can afford to pay.
âThereâs a rule of thumb that I have: Only pay about 3% of your gross income toward these bills,â said Antico, who added that if you live with your parents rent-free or donât have a car payment or insurance, you can bump up that amount to as much as 15%.
Medical debt doesnât accrue interest, so making hefty payments beyond your means can leave you in more dire circumstances than if you paid off other debts you owe â like those pesky credit card balances. If you donât have one already, itâs a better idea to put at least some of that money toward starting an emergency fund.
However, deciding how much your budget can handle is essential before you call your medical provider.
4. Talk to Your Provider (or Debt Collector)
Most medical providers are willing to work with a patient who canât afford their services â even after the services have been rendered.
So once youâve reviewed your bill and know how much you can afford to pay, itâs time to call your provider. Typically, youâll need to speak to an office manager at the doctorâs office or the billing department at a hospital.
Speaking with a human being is the best way to present your case, whether itâs explaining you didnât pay because the bill got lost in a move or proposing that you pay a portion of the bill in cash to have the rest of the debt forgiven.
After all, itâs in the providerâs financial interest to talk to you rather than turning over your bill to collections and potentially losing even more money.
Even if youâve heard from a debt collection agency, there is still hope to negotiate with the provider. The collection agency at that point is working on behalf of the provider, who may be willing to make a deal with you.
âI would start by going back to the originating provider â not dealing with the bill collector,â Goff said. âIf the provider canât or wonât negotiate, then ask the bill collector if you can settle the bill for a lesser amount.â
5. Set Up a Payment Plan
If youâre not in a position to make a huge cash outlay to erase your medical debt, ask your provider about potential payment plan options.
Working directly with the provider to arrange a payment schedule is definitely in your best, ahem, interest.
âIf you make a payment plan with a hospital, they donât charge you interest â you just pay the principal amount that you owe the next two, three, four, five years,â Antico said. âAnd theyâll take almost any payment plan that someone wants to pay.â
In exchange for reliably getting paid on time, your provider might also agree to a further discount if you offer to put your installments on automatic payments.
6. Learn From Your Mistakes
Just because youâre in debt doesnât mean it always has to be that way. You can learn from your mistakes and not put yourself further in debt.
Before your next trip to a medical provider, find out if you qualify for Medicaid or charity care â up to one-third of U.S. residents qualify for charity care, according to Antico.
âWeâre actually seeing people avoid going for preventative services, although itâs not even subject to even a copay or a deductible,â Goff said. âYouâre losing out on the benefit, including an opportunity to avoid greater illness.â
More than anything, both Goff and Antico stressed that early action can make the difference between paying off medical bills and sinking into financial ruin.
âWhen a patient doesnât pay attention and goes anywhere, does anything, and then wakes up to, âOh my god, I have all these bills and theyâre not going to be covered,â theyâre already behind the eight ball,â Goff said. âIf youâre going to run into an economic problem, say something early to your physician.â
After all, itâs easier to feel better when you have the remedy for your financial health, too.
