Three Tips for Handling Medical Bills
Eileen St. Pierre, The Everyday Financial Planner
One hospital visit or procedure can turn your budget upside down. If you have an emergency fund, it will drain it quickly. Financial experts will tell you to read your health insurance policy and make sure you know what it will and will not cover. But life has a way of disrupting the best laid financial plans. You may not have time to research which hospital or clinic is most affordable or right for your situation. An emergency is just that.
Once the bills start coming in, it is important to get a handle on them. Here are three tips:
- Know how many bills you can expect to get.
I needed to get a CT scan and a MRI last year. I got three bills for this one trip to the hospital:
- A fee for using the equipment from the hospital.
- A bill from the technician (an independent contractor) for performing the procedure.
- A bill from the physician (also an independent contractor) for creating the report sent to my doctor who never looked at it.
If I had also needed lab work done, there would have been a few more bills.
Can you imagine all the bills that would arrive if you need an operation? This MRI/CT scan led to two surgeries for me. I had to create a special folder to keep all the bills organized. There were bills from providers who I never knew were involved in my surgery. How can I dispute these bills? I was unconscious!
- Call your medical provider to make financial arrangements.
I had the money saved to cover the medical bills from my surgeries. But I knew from counseling others that I could set up a 0% payment plan with the hospital. All I had to do was call them. After making just one payment, they offered me a discount on the remaining balance if I would pay it in full. I jumped at this offer and ended up saving almost $1,400.
Be honest if you are having trouble paying. Many hospitals offer charity care. You will need to apply for it. The amount of charity care you are offered depends on where your income falls as a % of the federal poverty level.
- The hospital knows if you have a large out-of-pocket expense left to cover.
- Be prepared for someone to visit you in the hospital to discuss any programs you may be eligible for to help you pay.
- If you don’t feel comfortable discussing the subject at the time, ask for a contact number to call after you are released. Don’t sign anything if you aren’t well enough to understand what you are signing.
- Don’t let medical bills hurt your credit score.
Medical debt only hurts your credit score when it becomes 90 days past due. That’s when it goes to collections. If you still don’t pay, the holder of the debt may take you to court and get a judgment against you. Then your wages may be garnished or your bank account frozen. This negative information will stay on your credit report at least seven years.
The FICO 9 credit score gives less weight to medical debt in collections. However, many lenders do not use this credit score, particularly mortgage providers. The bottom line is to contact your medical providers before you are 90 days past due on your debts. They will work with you if you make the effort.
Visit my Debt Management page for more information.