Medical debt can create a serious financial hardship. Many health-related bills are surprisingly high, and you may not be presented with a lot of options for handling it in a manner that feels manageable. However, that doesn’t mean that you have to turn to bankruptcy to address these debts. There are other approaches that can work. If you aren’t sure where to begin, here’s a look at what you can do instead of filing for bankruptcy due to medical debt.
Review Your Medical Bills for Accuracy
First, before you do anything, you should review all of your medical bills to make sure the charges are accurate. If the healthcare facility didn’t send an itemized bill automatically, request one. Then, review every single line item and charge to make sure you are only billed for services you actually received.
If you find an inaccuracy, reach out to the facility and dispute it. That way, you can ensure that any medical debt you have is genuine.
Ask About Cost-Reduction Programs
If you are part of a low-income household, you may be eligible for financial assistance programs through the healthcare facility that are designed to eliminate your medical debt burden. Some will reduce the amount you owe by a specific percentage based on your income level and the amount owed.
With those programs, you usually need to complete some paperwork to prove eligibility. Additionally, if you don’t have health insurance, you may be required to apply for Medicaid to qualify. However, once that is done, all or a portion of your debt is essentially eliminated.
Negotiate for a Lower Rate
In some cases, you can actually negotiate your medical debt down. This is especially true if you are able to make a substantial lump sum payment but can’t cover the full amount. Some facilities may accept what you can offer in exchange for closing out the bill. They’ll consider it paid-in-full, even though you paid less.
At times, you may be able to use other approaches as well. For example, if you can prove that other nearby healthcare facilities charge less for an item or service, you may be able to leverage that into a discount if the difference was significant.
If you aren’t comfortable negotiating yourself, you can opt to hire a medical bill advocate. These professionals can assist with the process, ensuring you get the best deal possible.
Work Out a Payment Plan
Most large healthcare facilities have payment plan options. Some are income-driven, while others are purely time-based. With the former, how much you pay each month is derived from your income, ensuring that you don’t have to pay more than a specific percentage of your income each month. With the latter, the amount you owe determines how long you can repay. Then, the debt is divided by that set number of monthly payments.
Usually, you can find out about these programs by contacting the provider directly. In some cases, simply requesting to be placed on a plan is enough. In others, you may need to complete paperwork and provide supporting documentation, though the process tends to be straightforward.
Now, even if there is a set payment plan formula, that doesn’t mean you can request something outside of the norm. This is especially true if what you owe is close to crossing the threshold for a better deal.
For example, if the facility offers an 18-month payment plan for debts of $5,000 or more and a 12-month plan for debts under that amount, if you owe $4,925, they might honor your request for the 18-month plan. However, not all facilities will, though that doesn’t mean you should ask.
Do you have any other tips that can help someone avoid bankruptcy and deal with medical debt? Share your thoughts in the comments below.
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Tamila McDonald has worked as a Financial Advisor for the military for past 13 years. She has taught Personal Financial classes on every subject from credit, to life insurance, as well as all other aspects of financial management. Mrs. McDonald is an AFCPE Accredited Financial Counselor and has helped her clients to meet their short-term and long-term financial goals.
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