Did you know that more than 66% of all bankruptcies are related to health issues (medical debt or extended time off from work) and more than half a million families declare bankruptcy due to medical debt each year? These numbers have skyrocketed over the past several years as healthcare costs continue outpacing inflation – and wage growth – and people increasingly find themselves stuck with medical bills totaling thousands, if not tens of thousands of dollars.
While your next hospital bill may not be the straw that bankrupted the camel’s back, getting hit with an unexpectedly high medical bill can nevertheless pose a serious dilemma for most folks’ finances. The prospect of even a 3-figure medical bill can be alarming for some families, as nearly 50% of Americans would reportedly struggle to come up with $400+ in an emergency.
Whether you’ve recently received an extraordinarily high medical bill or you’re concerned about the possibility of receiving an unexpected hospital bill at some point in the future, thankfully there are some avenues for you to consider before paying the bill outright.
Check for Medical Billing Errors
Healthcare researchers say as many as 80% of medical bills in the U.S. could contain errors, which means it’s more likely than not that your medical bill contains billing errors as well. This can be anything such as failing to verify insurance (e.g., particular service coverage/authorization, maximum benefits already met, etc.), duplicate charges, inaccurate patient information, incorrect diagnostic or procedure codes inputted, upcoding (charging more to receive a higher reimbursement from the health insurance company) or unbundling (charging services separately when they’re supposed to be a single, comprehensive charge).
It can be difficult to detect whether there’s an error on your medical bill if the charges are not individually demarcated, so be sure to ask your doctor and/or hospital for an itemized list of charges before beginning the payment process.
Contact Your Health Insurance Company
Your next step in managing an unexpected medical bill would be to contact your health insurance company to request an explanation for uncovered services. Communication between hospitals and insurance companies isn’t always seamless and something might have fallen through the cracks before you got hit with the final bill.
Patients have the right to receive an easy-to-understand summary of their health plan’s benefits and coverage, and speaking with a customer service representative from your health insurance company could help you clarify what is covered and what isn’t (don’t always assume the hospital is 100% correct when saying X isn’t covered – cover all your bases by contacting all stakeholders involved to financially protect yourself).
Furthermore, patients can usually appeal decisions from their medical insurance providers; this doesn’t guarantee your appeal will be successful, but it’s nevertheless a potential avenue for saving money on medical debt repayments if you’re willing to put in the time and effort researching and building your case for an appeal.
Understand Consumer Protections for Your State
Even if there are few/no medical billing errors and your health insurance company agrees that you’re responsible for that amount of the doctor and/or hospital’s bill, there still may be a light at the end of the tunnel for you. There are many patients’ rights laws in existence to protect consumers against healthcare fraud, wrongful medical billing, and other healthcare issues.
When it comes to patients’ rights, it’s also important to understand what balance billing is and what protections your state mandates for consumers. In a nutshell, balance billing refers to an out-of-network doctor (working at an in-network hospital) or an out-of-network hospital providing care then billing the patient for any remaining amount left uncovered by the health insurance plan. As of 2018, just 25 states have some consumer protections against balance billing and only nine of these states have “comprehensive” protections for consumers.
Negotiate with the Hospital
If you’re still struggling with medical debt even after contacting your insurance provider and researching patients’ rights in your state, then you may reach out to the hospital to request a discount, financial aid or payment plan. As with other services covered by insurance, you can oftentimes receive a discount by explaining how you’ll be paying out-of-pocket for the bill instead of relying on your insurance company to reimburse the hospital.
You may also request financial assistance if you’re qualified as low-income and meet any other parameters established by the hospital (which usually works in conjunction with nonprofits to pay off medical debts through financial assistance programs). Notably, federal law requires nonprofit hospitals to provide financial aid for low-income patients, so check the profit vs. nonprofit status of your hospital before contacting them for financial assistance opportunities.
Even if you’re not considered low-income, you could still access some financial relief by setting up a payment plan with the hospital. Of course, this should be one of your “last resort” options, but at the very least, you don’t need to worry about taking out a loan or racking up credit card debt to repay medical bills if you can negotiate a reasonable payment plan with the doctor and/or hospital.