I have medical bills I cannot repay, and need an expensive procedure I know I can't afford. I don't know what to do. What are my options?
Medical bills are a big problem for many households. According to a 2013 study, medical debt is the No. 1 cause of bankruptcy. You might avoid a staggering medical bill if you qualify for a government, private, or hospital assistance programs. Make sure you understand your bill, and enlist the help of an advocate if you think a medical bill is incorrect. Learn your options if you cannot afford to pay your medical bills.
I’ll start with how you can avoid a large medical bill, and what to do if you are surprised by a large medical bill. Let’s look at what you can do to find payment help before you have a procedure.
The best time to deal with a large medical bill is before you receive the service. If the procedure is not an emergency, then take these three steps before you sign any contract with the doctor’s office, clinic, or hospital:
Patient assistance programs vary, and each hospital calls their programs by a slightly different name. Generally, hospitals offer two types of assistance programs: Charity (no cost to you) and discount programs. Patient financial assistance and charity care programs are designed to be applied for before you receive the treatment, but there are no prohibitions to apply for them after you receive your first medical bill.
Charity programs vary, but often apply if you are uninsured and receive emergency treatment. Qualifications are based on a comparison of your financial resources and income to federal poverty guidelines. For non-elective care, you qualify and receive free care if your household financial resources or income is at or below 200 percent of the federal poverty level.
Discount programs, which are sometimes called financial assistance programs, apply if you are uninsured and do not qualify for Medicaid, charity care or other assistance programs. Your household financial resources and/or income may be greater than 200 percent of the federal poverty level.
To qualify for charity or financial assistance programs, you will be asked to complete a form and include either your most recent federal income tax return (for example, a 1040, 1040A, or 1040EZ), or other documents listed in the hospital or clinic’s application form, such as your state tax return and pay stubs that verify your income.
It’s no secret medical bills are among the most complicated and confusing most of us will see. The American Academy of Family Physicians published a brief guide to understanding your medical bills. If it appears your medical bill contains an error, discuss the charges with the service provider. Alternatively, consider hiring a consumer advocate such as Health CPA, or Medical Cost Advocate or Insurance Negotiating Service. These three services work on a contingency basis, which means they cost you nothing if they cannot save money on your medical bill.
If you exhausted all the options mentioned above, you have four options:
Help may also be available though church, civic, social, and fraternal groups in your community, as well as Salvation Army, Catholic Social Services, United Way, Jewish Social Services, and others that can be found in the yellow pages. Your situation may seem dire, but you are not alone in facing these hurdles, so reach out these and other reputable organizations.
A settlement is where you and the provider talk about what you can afford to pay, and what the provider is willing to accept as payment. See the Bills.com Rules For Negotiating Your Medical Bills article to learn the six rules to negotiate with a medical provider.
From a legal perspective, a medical debt is just like other unsecured consumer debts, such as credit card debt or payday loans. From a negotiating perspective though, medical debt is more complicated than credit card debt because a medical bill is usually includes services provided by several doctors, labs, and other providers. It is rare for all parties to accept less than the full amount due. If you make no headway by negotiating on your own, then you may wish to hire a debt relief provider to develop a debt consolidation payment plan you can afford.
There are two types of consolidation loans. The one that best suits your situation depends on whether you own a home and if your credit score is high. One option is a cash-out mortgage refinance to consolidate debt. A Bills.com partner will give you a no-cost mortgage refinance quote.
If you do not own a home or other property to offer as collateral for a debt consolidation loan, consider an unsecured loan. An unsecured loan is one not tied to (or secured) by something you own. Your ability to qualify for either a credit card or a personal loan that will actually save you money depends on your credit score and the amount of your existing debt. If your credit history is less than perfect, you may have difficulty finding a lender willing to extend you credit, and if you do find a loan, you should expect a high interest rate.
A possible loan source you may want to explore is a peer-to-peer loan. Prosper or Lending Club offer peer-to-peer loans. Both Web sites put private lenders in contact with private borrowers. A private lender may be more willing to lend you money than a traditional bank.
Bankruptcy is a last resort for resolving medical debt. It is, unfortunately, an option many people are forced to choose, and according to a recent study the No. 1 cause of bankruptcy in the US. Bankruptcy is not a good option if your medical bills are due to a chronic illness where medical costs are likely to continue after you file for bankruptcy. US bankruptcy law sets a minimum amount of time between bankruptcy discharges. Therefore, bankruptcy is good choice when the medical debt is due to a rare calamity.
Medical debt sends many households’ finances into turmoil, and is the No. 1 cause of bankruptcy in the US. Learn if you qualify for assistance in paying your bill. Contact your local government and charitable groups to learn if you qualify for assistance. Review your bill and dispute any errors. Consider negotiating a settlement to your delinquent medical debt. Enlist the help of a pro if negotiating is not one of your skills.
I hope this information helps you Find. Learn & Save.