Healthcare costs can quickly become enormous, but consumers often have more power than they realize. Recent changes to how medical debt is reported by credit bureaus can also help. The first step is to always check your bills closely for errors and ask your provider if they qualify for the financial assistance programs many hospitals offer. Employees and workplace employee benefits representatives can also help. Finally, be sure to stock up on emergency savings and scour providers in the network to prepare for future bills.
When she was 19, author Emily Maloney found herself facing nearly $50,000 in medical debt after hospital treatment for a mental health crisis. Her debt haunted her throughout her 20s, damaging her credit and leading to stressful phone calls from her debt collection agency.
Her experience is all too common. The Consumer Financial Protection Bureau reports that her household has medical debt in about five households in the United States. Those with medical debt are more likely to face anxiety, stress, or depression and may avoid filling prescriptions because of the cost.
“Healthcare debt risks are looming over all consumers and impacting their lives,” said John McNamara, Assistant Director of Consumer Credit, Payments and Deposit Markets at the CFPB. He adds that recent changes to how medical debt is reported by credit bureaus should help consumers. Paid medical debt will no longer appear on your credit report, and new medical debt will no longer appear until 12 months have passed (up from 6 months). Additionally, in the first half of next year, credit bureaus will stop reporting his unpaid medical debt under $500.
Ultimately, Maloney’s debt was settled through a combination of helpful customer service representatives and overrunning her state statute of limitations. rice field. She wants to assure others facing medical debt that steps can be taken to reduce it.
“It takes time, but it’s worth trying because you can challenge the insurance company’s decision or ask[the provider]for a discount,” she says.
In other words, consumers may have more power than they think. There are several ways to exercise that power over your medical debt.
Check your bill carefully
It’s tempting to shove large bills in the trash in frustration. We recommend that you check it.
“It’s an unreasonable amount of homework for us because if you find a mistake, you have to complain and take your time. But there are mistakes in some medical bills,” he says.
Weissmann said it’s also worth checking your rights under the No Surprises Act, which comes into force in January 2022 and protects consumers from unexpected medical bills.
Ask your provider for help
Many hospitals offer financial assistance to those who meet income criteria. “If you receive an amount you didn’t expect, call the hospital and ask, ‘Am I eligible for a discount?
Hospitals often have “charity care” policies that grant lower prices or completely forgive debt, but consumers may have to be proactive in asking for them. varies by state and hospital, but nonprofit hospitals must have a financial assistance policy. Hospitals may also offer payment plans, so you can have more time to pay.
Hospitals can also offer financing options such as personal loans and medical credit cards. This is convenient, but it also comes with risks. CFPB’s girlfriend McNamara warns that credit cards, for example, can accrue additional interest.
Seek support persistently
Lorraine Coughlin is president of LMC Medical Claims Management in West Palm Beach, Florida, where she helps people calculate medical costs with insurance companies to earn a living. The best strategy, she says, is persistence.
“You have to call and ask questions. If you get a bill out of the blue, just don’t pay,” she says. In some cases, it can take her an hour or more, but making that call could save her thousands of dollars, she says.
Medical billing advocates like Coughlin do the work for you, but they usually charge a portion of your fees and savings. McNamara warns that there are looters who claim to be billing and consumer advocates, but in reality they may steal your money without offering any real assistance. We encourage you to do your research before sharing any information or paying any upfront fees.
If you don’t get a satisfactory answer from your insurance company and you’re employed, Gundling suggests seeking help from your company’s employee benefits contact. “They can be your advocate,” he says.
Prepare for your next medical claim
The ideal time to tackle medical debt is before it happens, Gundling says. Contingency funds become even more important as you face more bills that are unsatisfactory.
“If you know you have a plan with a large deductible, bank your cash,” he says.
You can set aside money through automatic deposits into a high-yield savings account, or take advantage of Healthcare’s flexible savings account if your employer offers it.
Similarly, Gundling suggests asking about insurance coverage and providers in the network before seeking treatment whenever possible.
The bottom line is that attacking medical debt instead of ignoring it, as Maloney did, may ultimately be our best hope for putting it on the back burner.
This column was provided to The Associated Press by personal finance website NerdWallet. Kimberly Palmer is a personal finance expert at NerdWallet and author of “Smart Mom, Rich Mom.”
