If you’re like most of America, you’re in the process of paying off some medical debt. Studies say that 1 in 10 Americans have some form of medical debt, and most of us aren’t super pleased with this arrangement. In the past couple of years, I’ve had several life events (like birthing babies and getting dental work done) that required medical care costing thousands - even with my insurance covering most of the procedures. So, I started diving into the world of medical debt relief so my family wouldn’t suffer from the interesting (to say the least) healthcare situation in America. Here are some options I’ve found extremely helpful as I’ve navigated the murky waters of medical debt.
Negotiate Your Debt
First of all, one of the best-kept secrets of medical billing is the possibility of negotiation. Did you know that most hospitals will work with you to find a price for their services that you can afford? Many times, as I’ve called to negotiate with medical billing departments, they’re willing to offer 10%-20% off my bill if I pay in full. This has saved me hundreds of dollars!
Financial Assistance from the Provider
Next up is financial assistance. Many hospitals are required to provide financial assistance plans to their customers. This means that if you fall within a certain income bracket, you might be able to apply for a medical debt relief program and pay a discounted price on your procedures (or nothing at all). Ask your provider if they offer a plan like this, apply, and follow up to see if you are eligible for assistance.
Consolidate Your Debt
Consolidating debt is a popular form of managing many payments - and it’s pretty self-explanatory. This process includes going to a lender and essentially having them buy your debt, so you can just make one consistent payment with one interest rate to one lender (instead of tackling many debts with many interest rates). Consolidating your debt is a great way to start getting on top of your payments after you’ve tried to negotiate your debt and applied for financial assistance when available.
Bankruptcy as a Last Resort
As a last resort, you could declare bankruptcy. This route is taken when your debt truly exceeds anything you could ever anticipate paying back with your income level. Filing bankruptcy is a lengthy process that may include selling your valuable assets, losing good standing with healthcare providers, and other complicated legal processes. We don’t recommend looking at this option unless you’ve exhausted all other avenues, but it can be life-changing when used at the right time.
Common Medical Debt Pitfalls
Here are a few routes not to take if you’re navigating the healthcare system right now:
1. Putting medical debt on your personal credit card
This might get debt collectors off your back, but it’s not a great long-term plan. The interest rates on most credit cards don’t allow much time to pay back your debt, so only put medical debts on a credit card if you’re sure you can pay off the card in a timely manner.
2. Blindly paying medical bills
Before paying a medical bill (or any bill, really!) read over all the details. The patient, the doctor, the procedure, the medications, and the care provided should match up with your knowledge as the patient. Bring up any discrepancies in the bill with your provider. Then, see if you can negotiate the price of the bill before going ahead and paying it.
Medical debt shouldn’t drag you down. If your income level doesn’t allow for paying off the debt you have, there are several avenues that might save you stress and money in the long run. Make sure you check out these avenues for relief the next time you’re staring at a pesky medical bill.