How To Start Paying Medical Bills You Can’t Afford
Let us start with a disclaimer. We at eCheck.org are a mixture of financial experts, business owners, entrepreneurs, ex bankers, a lawyer, editors, proofreaders, business leaders, wealth managers and a boss who rules us like a king. Our combined knowledge can tell you anything you wish to know about credit, debt, taxes, mortgages, and much more. Yet, none of us are experts in the field of medical bills or the medical industry/sector. The information in this article is based on a mixture of my and the people at eCheck’s combined experience, along with several days of solid research. As with any information you read on the Internet, take the time to check and verify it before you act upon it.
You Have To Pay Your Medical Bills
The reason why some people think they do not have to pay their medical bills is the same reason some people think they do not have to pay their student loans. The reason is because the people who nag you for the money are not very aggressive about it. You can ignore their letters for months and nothing will happen. Whereas, if you ignore messages about your car payments, then you will have people calling you, knocking on your door and taking your car back within days/weeks.
You Do Not Have To Pay Your Bills All At Once
Remember the disclaimer at the beginning of the article, here is a point where it applies. There are some medical bills in some areas where you do not have to pay the entire balance right away. You may be able to pay in installments or over a period of time as determined by the healthcare provider. However, I have no doubt that there are some healthcare companies, some cities and some states where medical bills must be paid at once by you or your insurance company.
You Do Not Always Have To Pay The Entire Balance
Again, remember the disclaimer, and check the details of your medical expenses and insurance before you act on this. There are times when the original balance is simply the amount you pay under certain repayment conditions, and there are many times when your insurance company will pay off most, all, or some of your balance. There are also cases where people are entitled to government assistance or discounts after the fact. Sometimes you may even earn discounts for paying early or paying in with a one-off payment.
Will Medical Bills Affect Your Credit Rating?
Yes they will if they are unpaid. However, they shouldn’t affect your credit rating if you are in the process of contesting your bill, and if you have agreed to pay in installments. It shouldn’t affect your credit rating if your insurance company is paying your bills, if the government is paying your bills, or if a lawyer or ombudsman is negotiating a better rate.
A website called BankRate claims that 2 out of 5 people have a negative mark on their credit rating because of unpaid medical expenses. I cannot find any proof that it is true, and their affiliate links to credit companies makes me dubious of their “facts,” but their figure is quoted by quite a few online articles, so it may be true (remember to be skeptical about what you read online).
Your Credit Rating May Not Be Affected
Many people have collections for amounts of less than $100 due to medical expenses. If this has happened to you, then you may be in luck because some credit scoring companies are ignoring collections of less than $100. Credit.com say that collections due to medical debts do affect your credit rating, but most lenders and credit scoring companies will ignore them if they are for less than $100.
Your Credit Rating May Be Affected
Gina Roberts-Grey writes for Investopedia, and she has met one of our eCheck team, so we know her articles are not outsourced to middle eastern writing mills. She claims that 14% of US consumers have medical debt collections on their FICO score because they exceed $100. She also says that as much as 53% of collections in the US are medical-debt-related. It sounds like a lot, and it certainly makes the 2 out of 5 figure that the BankRate website floated seem plausible, but the figure covers a massive amount of possibilities, from scraped elbows to cancer treatment and breast implants. Suffice it to say that clearly medical debt collections are “relatively” common and are clearly affecting people’s credit ratings (FICO scores).
How Long Before Your Medical Expenses Are Collected?
In many cases, your medical debts will be forwarded to a collection agency between 90 to 120 days after you receive your first bill. That is between three to four months after your first bill, which explains why some people think they can get away without paying their medical bills. It also explains why so many go to collections because there is plenty of time to forget about them and put them off.
You Have Three Months, So Check Your Bills
It is imperative that you check every single bill and expense that you receive from your medical care provider. Each expense will pass through several hands and there is lots of room for error.
Check your bills and keep detailed logs of what you receive, what happens and when. It is difficult to do when you are ill and you are just happy to be in the hands of professionals, but it may save you hundreds and maybe thousands of dollars.
An Example Of How Incorrect Medical Bills Are Generated
For example, if you are collected in an ambulance, then that expense may be passed from the company that picked you up to the accounts department of your medical care provider. It is then passed to the person responsible for generating your bill. On Wednesday, you may have driven yourself to the clinic, where on Thursday and Friday you were taken in by a booked ambulance.
Jenny in accounts sees that you are often picked up and driven in by an ambulance, and she sees that you received treatment on Wednesday but that there is no ambulance charge. She assumes the ambulance company has submitted an invoice that she hasn’t processed yet, so she charges you an ambulance fee for Wednesday.
Ask For An Interest-Free Payment Option
If your medical Care Company offers a payment plan, but they charge interest, then ask that they drop the interest. If they will not, then you should consider switching doctors and ripping them apart on Yelp, Google+ search engine reviews, and whichever other online platform you can find.
There are quite a few trustworthy and long-established medical companies in the US that offer interest-free payment options to help you pay off your medical bills and debts.
Call your medical care company and ask if they offer an interest free payment plan for paying off medical bills. You will be surprised how many times they point you to some fine print on their website or on your e-bill where they offer a payment plan.
Negotiate Your Payment Plan
They are going to ask for a certain amount you should pay every month or every billing cycle, and if it is too much or too little, then you should strongly consider negotiating. The medical company you are dealing with should be well aware of just how many people do not pay their medical bills. They are aware of how much going to collections costs and how much they are likely to lose through using collections agencies. If your medical care company is well managed, then it should prefer receiving full payment over a longer time, than a partial payment by selling your debt to a collections agency.
The Credit Card Route
Stay clear of credit cards, especially if you are ill and you are missing a lot of work. However, if you are good at managing your money and your debt, then credit cards may be answer you need to take the heat off and start paying your medical bills.
Find a credit card deal that has a 12-month interest free on purchases. Check with the credit card company to be doubly sure that paying your medical expenses counts as a purchase, so you may enjoy the interest-free period.
Manage Your Debt
Do not put your medical bills on your credit card and then ignore the debt because you have a year before you are charged interest. It is imperative that you imagine you have set up a payment plan with the company and stick to it.
Let’s say that you have just paid your debts of $1350, from a credit card with a limit of $1500. Do not spend another penny on that card. Simply spread the cost of your medical care over 12 months and pay a set amount each month. In this case, you need to set up a direct debit (auto pay) for 12 months in the amount of $112.50 per month. Set it to run for 12 months and have it taken out of your wages the same day you are paid so you do not miss the money.
Get A Discount Or A Better Price
Negotiating for a better price AFTER your treatment is a cheeky move, but when you are ill, you cannot sit in the operating theatre haggling for a discount while your foot is hanging off. Try to get a discount after the fact by asking if they give discounts for lump-sum payments, or you may use the Healthcare blue book to negotiate–especially if you require further treatment in the future.
Lump Sum Discounts On Your Medical Bill
Remember how the medical companies know all about people not paying their debts? Remember how it costs them money to send your account to collections? Instead of going through the hassle of months of hounding you and instead of going to collections, they may agree to a discount if you pay your debt in one lump sum within 30 days of your bill being issued. If they agree to the discount, then pay with a personal loan or with a credit card (with 12-months interest free as suggested earlier).
Use The HealthCare Blue Book
Before you go for treatment, you should use the HealthCare Blue Book to negotiate for a better price. It shows what other people are paying for similar treatment in your area, in your city, and even in your state.
It is not impossible to negotiate a discount after your medical bill has been issued. You may contact the department that deals with your bill and quote a few figures. Do a little negotiating and strike a deal both for the medical bill you just received, and for the treatment you need in the future for your associated treatment.
Conclusion – Insurance? Medicaid? National Assistance?
There has been little mention of insurance, national assistance, Medicaid, or any other form of private or government assistance because this article is about paying medical bills you cannot afford. It assumes you have tried other methods and you are now stuck with bills you cannot afford. Hopefully, this article has given you a few ideas to help you pay your medical bills a little more easily.