How to Handle Medical Bills Debt

I have high medical bills and more to come. What are my options?

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Medical Office Insurance Card | Medical Debt
Bill's Answer: Answered by Mark Cappel

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:

  • If you have insurance, either call your insurance customer service people to learn if your procedure is covered, or ask your provider to obtain pre-approval. You may need to change doctors, or ask your doctor to perform the procedure at a different location to obtain the highest amount of coverage from your health insurance provider. Many hospitals will not perform a non-emergency procedure without determining how you will pay for it.
  • If you do not have health insurance, learn if you qualify for Medicaid, Medicare or a private charity’s grant to pay for your procedure. In some areas, United Way’s 2-1-1 hotline can help you learn more about private medical payment assistance programs for in your area.
  • Most hospitals provide patient financial assistance and charity programs to people with low or no income. Be prepared to share details about your household income when you apply for a patient financial assistance or charity program.

Patient Financial Assistance

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.

Wise AdviceMedicaid and Medicare Eligibility To be eligible for federal Medicaid coverage, you must be more than 65 years of age, meet income guidelines or have certain disabilities. Children and pregnant women may also be eligible for benefits. Contact your state Health Dept. about eligibility requirements for Medicaid and Medicare.

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.

Wise AdvicePoverty Guidelines The federal poverty guidelines vary each year, where you live, and how many people are in your household. For most states, the 2013 poverty guideline for a one-person household is $11,490. Add $4,020 for each person in your household to learn if you are above or below the poverty guideline.

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.

Understand and Review Your Medical Bill For Errors

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.

Negotiate a Settlement If You Cannot Afford to Pay Your Medical Debt

If you exhausted all the options mentioned above, you have four options:

Apply for Aid

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.

Negotiate a Settlement With the Service Provider

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 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.

Help for medical debt Talk to a debt settlement partner to learn your options to resolving your medical debt.
Consolidation Loan

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 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.

File for Bankruptcy Protection

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.



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Comments (133)

Alyssa L.
Spokane, WA  |  April 18, 2014
I am 23, a full-time nursing student, and mom who relies on financial aid, work-study, Medicaid, and food assistance to get by. I have a heart condition and in 2009, I had surgery for a catheter ablation (which they were unable to do and will require a different surgery at some point). At that time, my medical coupons I received after my dad died had ended (even though they weren't supposed to until I completed schooling) and my mother has felonies/substance abuse/homeless issues throughout the years since my dad's death, so I have been basically on my own. When I needed this surgery, my godmother had set up a private insurance plan for me so I could still have some coverage and what that wouldn't cover, my biological mother had a medical card/coverage plan that would cover the remainder. Yet, I was the one that is receiving calls for over $4,000 balance that started in 2011, I believe... I have explained over and over I cannot afford to pay this -- I am a single mother, full-time student. This debt on my record has hurt me over and over, with trying to get into apartments/rentals, small loans for a reliable car because mine always breaks down. My question is, it's been 5 years now, do I keep telling the collectors I can't pay and set up a payment plan when I graduate and get a job? Is it true after a certain point I can no longer be held responsible to pay the debt?
April 18, 2014
Were you 18 when you had the surgery? If not, you may have no liability for this medically necessary procedure.

Regardless of your age at the time of the procedure, I want you to consult with a lawyer who has consumer law experience. I want you to learn your options for resolving this debt from someone who has a better understanding of your circumstances than I do. You indicated you reside in Washington. If you cannot afford a lawyer, contact the Washington Advocate Resource Center or another Washington pro bono program to find no-cost legal services.

In the meantime, read the article describing the Washington Collection Laws so you have a better understanding of your rights and potential liabilities. In particular, review the section on Washington's statutes of limitations.
Aaron M.
Cairo, NY  |  March 02, 2014
I had an emergency appendectomy 3 years ago and at the time I was on unemployment but I was told that I made $4 to much a month to qualify for medicare so I was stuck with a bill over $20,000 after all my follow up appointments. Naturally I could not return to work until I got better from surgery and by that time my account was put into collections. It is completely destroying my credit and any chances of renting or owning a home. What are my options? I have considered bankruptcy but I am just wondering if I have any other options. Thanks.
March 04, 2014
You could try to reach a settlement with the collector, paying only if you get a letter in writing that the debt will be settled in full when you pay. BK is an option, if you qualify. It will harm your credit, preventing a mortgage for a period of time and perhaps being a problem with potential landlords. But, it could save you a ton of money.
Diane R.
Martinsburg, WV  |  August 23, 2013
I just received a bill from our hospital for a bone scan done over two years ago! It was the first bill I received! I was told at the time that this is completely covered by Medicare and you are eligible for one every two years! The hospital billed it wrong and never tried to bill it again. I called Medicare and they told me I wasn't responsible. Upon going to the billing office, the hospital informed me I was wrong and had to pay it. They said you signed a waiver to pay for this if your insurance didn't! However, they couldn't produce the waiver, but I know I didn't sign one! Anyway, they agreed to write it off. They also told me they are going over old bills that were billed wrong and re-billing people! My this lawful? If people have insurance in place and the medical facility bills it wrong and refused to re-bill, why is it my responsibility to pay? Also, I was told that when you go to a medical facility you do not have to sign a payment waiver if you have insurance, they can't make you!
August 28, 2013
We receive a lot of questions from readers whose insurance would have covered a medical bill, if it had been submitted in a timely manner, but ended up as the personal responsibility of the patient due to a delay that was caused by the medical provider. While that seems quite unfair, it appears to be legal. I am glad that in your case, they agreed to waive the charges. Regarding the payment waiver, I am not sure if they can require you to sign one or not, or how not signing one could affect their deciding not to treat you.
Serena H.
Brier, WA  |  July 02, 2013
I am a full time student and I'm unemployed. I went to the ER twice and total I owe $458. The first visit to the ER, I didn't have an insurance and I was unemployed. The second one, I had school insurance, but it didn't pay off completely so I still owe them some money. How can I get through this?
July 02, 2013
Check with the hospital to learn if it offers a hardship assistance or financial assistance program. Otherwise, you need to negotiate a settlement to your medical bills.
Alex V.
Columbia, MO  |  June 13, 2013
I'm getting bills for a visit almost a year later. In Missouri can they bill you >90 days after a clinic visit?
June 13, 2013
The general rule is a creditor, including a medical service provider, may attempt to collect on an account until it is paid. That is not the case in two states, but Missouri is not one of the exceptions. I imagine two parties could place clause in a contract where the two would set a short time limit on making breach of contract claims against each other, but I have not seen such a clause in a consumer contract.

Perhaps you are in a situation where a medical service provider failed to send its initial invoice to your insurance carrier a year or more after it provided its services. If this is your situation, it is likely your insurance carrier rejected the claim because it was not filed in a timely manner. If that is what happened here, consult with a Missouri lawyer who has consumer law experience. Ask him or her to draft a letter to the service provider stating that because it did not bill your insurance provider in a timely manner it violated the contract you two had where it explicitly or implicitly promised to submit its bill to your insurance in a timely manner. Because it failed to do so, it would be unjust and unfair to make you financially responsible for its negligence.
Stephani B.
El Paso, TX  |  November 10, 2011
Hello. I am an Army Wife station in El Paso, Tx. I moved here Dec 2008 and, apparently, went to the ER Feb 17 2009. I just found out yesterday that this dr sent me to collections on a bill I never knew about. I have tricare and they pay for everything. After making a lot of phone calls, I find out he waited 2.5yrs before sending in a claim to my insurance company. The claim stated he sent it in July 2011 and August 2011. Tricare denied it as the "filing time limit" has passed. During this whole time, up until yesterday (11/9/2011), I did not receive a single bill, notification, or statement of any kind stating I had a bill due. My insurance company never contacted me stating a claim sent in was denied. Now I have NCO FIN contacting me about this bill. What can I do in this matter? Can the really send me to a collection agency without ever informing me of this bill and not ever giving me the option to attempt to pay it? Thank you for help, Bill!
November 14, 2011
Read the following resources make yourself a more informed consumer:

It is patently unfair and unreasonable for a medical service provider to bill a patient for services long after the patient's medical insurance will accept the invoice. It shows the medical service provider is not in control of its finances, but I digress. It may also be contrary to the contract the service provider made when it agreed to accept the insurance.

My advice? Validate the debt. A debt that cannot be validated need not be paid.

Julie F.
Barboursville, VA  |  February 01, 2012
If the provider was contracted with Tricare and they did not submit the claim within the filing limit, they CANNOT transfer the cost to you. They have to write it off. If they are NOT contracted with Tricare then they do not have to. Also, the provider would have to prove that they sent it to Tricare AND they must prove that Tricare received the claim.
Matt A.
Charleston, WV  |  October 28, 2011
In January of 2007 an out-of-network doctor performed the delivery of my son. Prior to labor we had an arrangement with our in-network doctor which would have our covered our expenses. At the last minute without a verbal or written the out-of-network doctor appears to deliver my son. After the insurance refused to pay the balance owed they sent us a bill in May of 2007. After several conversations I informed the physician's office that I was unable to pay the full amount, which mysteriously was in my wife's name instead of mine, the insurance policy holder, but they refused to negotiate on a reasonable payment plan due to the low balance (less than $1000.) Today, October 2011, I find out the bill has been turned over to collections after 4 years of us never receiving a statement from the doctor. I have not been contacted by the collection agency as of yet either by phone or by mail (I found out about the debt via a credit report I requested for my wife) and according to West Virginia state law (WV being both the state we live and the state where the procedure occurred) the statute of limitations for legal action in such a case is 5 years from the date of service. Should I, if contacted, go through the process of requesting validity and, if the validity is not sufficient, see if the SOL runs out? After one year of no bills I honestly thought the debt had been written off considering we applied for their charity program.
October 28, 2011
You seem surprised someone other than your doctor performed the procedure. It is a shame you did not consult with a lawyer immediately regarding this issue because a doctor (or other person) who performs a procedure without the patient's consent is guilty of battery.

By all means validate the debt.
Diana R.
New Castle Hundre, DE  |  October 14, 2011
Hello I have the same problem I own $2,518.60 to the hospital of Delaware on ultrasounds since last October and today I got a letter from a Law Office saying that they have the authorization to suit me and I don't know what to do.. I have 3 kind and unemployed I receive food stamps and tanfs (welfare). My husband was layoff for over 9 months he recently went back to work last week and the house utilities are a lot Plus rent I can't afford to pay and I have 30 days to respond to these letter I also have to say that I'm not a us citizen and it makes harder on me.. Pls any advice what would happen if I don't answer within 30 days?? I'm freaking out :(
October 14, 2011
Learning your rights and liabilities will ease your fears of the unknown. Several reading assignments for you: Start with Collection Laws & Exemptions by State to learn what exemptions may apply to you in your state of residence. Second, read Served Summons & Complaint to learn how the collections process works in general. Next, read Collections Agencies, Collections Laws and Your State's Statute of Limitations. Finally, you mentioned you are a foreign national. Federal and state debt laws apply to residents and not citizens. In other words, it does not matter if you are a citizen of the US or Mars, a state's debt laws apply equally to all residents in that state.
Mark G.
Hurricane, WV  |  September 27, 2011
My 23 year old uninsured, soon to be employed, full-time-student nephew that lives in my basement because his mother has cancer and grandfather needs and operation has paid $100 per month for two years on his hospital bill and has $3000 to go. Whether or not there was an official payment plan, I do not know, but the have accepted his payment in all cases up until now. They have moved his account to a credit agency that is demanding full immediate payment of the remaining $3000 within one day or they will put it on his credit rating. The hospital has stated that they are not interested in negotiating another payment plan. My poor nephew is likely going to borrow the full amount on a credit card. The collection company suggested that his only other option was to apply for welfare, and with that in place, they would not demand full payment. Does he have any other options? Can they nullify/change his "repayment plan" after accepting his money for two years? The entire debt would have been paid off in another 2.5 years.
September 27, 2011
The legal jargon you hint at is in the estoppel branch of civil law called the doctrine of acquiescence. This is where a party, without malice, infringes on a right while the injured party knowingly stands by without raising an objection to the infringement of their rights. This is also called acquiescence by silence.

Consult with a lawyer in your state who has consumer law or civil litigation experience to learn if the doctrine of acquiescence has been a successful litigation tactic.
Sara L.
Garden Grove, CA  |  September 21, 2011
Back in 2009, I went to the emergency room because of a concussion. The bill came out to approximately $5,000. My insurance covered half and I was left with about $2,500. At the time, I was only 19, unemployed, and living on my own. I wasn't able to afford to pay my share of the bill so it went to collections. In 2010, I ended up in the hospital due to a viral infection and the bill came out to be around $2,000. That bill also went to collections as I am still not able to afford it. I am now left with about $5,000 of medical bills that have been sent to collections. My question is: If I leave it alone, will this affect me in about 10 years from now? Also, if I pay it off in 5 years, does it make a difference? I still cannot afford to pay off my bills but I know I'll be able to once of these days after I am able to get a good job but I just want to know what I should do at this point...
September 21, 2011
There is a statute of limitations on debt. The length of the statute depends on your state of residence.

You don't say if anyone is trying to collect on this debt or not. If not, you can choose to wait things out, hoping that the SOL passes, eliminating your obligation to pay. Even if the SOL passes, the debt can continue to affect you, by appearing on your credit report for 7½ years after the first delinquency.

Whenever you have the means to start paying on the debt, you can choose to contact the creditor to attempt to work out a payment plan. If no one is contacting you, keep in mind that if you approach a creditor in good faith, attempting to reach a payment you can afford, it can lead to more aggressive collections and threats of legal action. That may not happen, but is a risk to be aware of.
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