Medical Bills Piling High? You Need a Plan

As you are likely well aware, the cost of medical care in the United States has skyrocketed over the last quarter century. From health insurance premiums and medication to doctor visits and surgical procedures, the costs just keep inching up and up.

For many households, the high cost of medical care leads to the accumulation of significant medical debt. Research shows there are currently more than 42.9 million Americans with medical debt (60 percent of which have health insurance). One out of every four Americans says they have trouble paying medical bills – including 15 percent of those with a household income higher than $100,000 per year. One-quarter of all households admit to having more in medical debt than they have set aside in emergency savings.

6 Steps and Strategies

If you’re currently struggling with high medical bills, it’s time to develop a proactive plan for escaping this mess. Here’s what you need to do:

1. Get Organized

As stressful as medical debt is, many people get to a point where they just want to block out the noise and forget about it. They toss bills into a drawer – often before opening them – and refuse to check voicemails, return phone calls, or log into online patient portals. But this needs to stop. To tackle medical debt the right way, you have to get organized. Gather bills, consolidate information, and make a spreadsheet that contains the full amount of each bill so that you know exactly what you’re facing.

2. Look for Billing Errors

Most people look at medical bills and assume the amount owed is accurate. But this isn’t always the case. According to Medical Billing Advocates of America, 80 percent of the bills they review have errors in them. Furthermore, research shows that hospital billing errors frequently result in overcharges up to 26 percent.

Spend time reviewing your bills and always ask for itemized cost summaries. If you don’t understand something, ask questions. If nothing else, this will help you understand exactly what you’re paying for.

3. Negotiate High Bills

“Depending on the hospital or doctor’s office, the amount you pay each month may be negotiable,” personal finance blogger Patty Lamberti writes. “They’ll start out with a number that may be too much for you. Don’t be afraid to talk them down.”

Hospitals have so much margin in their billing that they’re almost always willing to knock an account balance down to collect. For example, they’d much rather take 85 percent up front than spend the next 24 months chasing down 100 percent of a bill you might not be able to pay.

4. Work Out a Payment Plan

Perhaps the bills are manageable, but you need some time to pay them off. Instead of letting the bills sit there as interest piles up, contact the hospital and ask them to work out a payment plan for you. In some cases, they may even offer interest-free payment plans. Be honest, use your common sense, and try to find a payment plan that will fit into your budget.

5. Take Out an Emergency Loan

If – even after identifying errors, negotiating bills, and working through a payment plan – you can’t cover the bills, you may consider securing an emergency loan that provides quick cash with flexible repayment terms. If the interest rate is lower than your medical bills, you’ll end up saving money (and eliminating the stress of having medical bill collectors contact you multiple times per day).

6. Apply for Financial Assistance

Depending on your situation, you may qualify for some sort of financial assistance program (either through the hospital or via a third-party organization). Try contacting your city or county government representative or local social service agency. Community organizations and churches may also have funds that can used.

Be Proactive With Debt

You can’t sit back and watch your medical debt grow. While it’s not a fun problem to have, you need to step up and take action. It’ll take time, money, and lots of patience, but you’ll eventually see things through to the other side and rediscover what it feels like to be happy and carefree.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes.