How to negotiate and pay off medical debt

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Ask a Lender
June 14, 2017 | Updated September 25, 2017

Key Points

You can negotiate a lower medical bill even after receiving care

  • Check your bill for errors and ask your provider for any discounts off the total.
  • Many medical providers offer interest-free repayment plans.
  • Using a medical credit card can incur high interest costs if the bill is not repaid within a set period.
  • A personal loan is another option if you cannot obtain an interest-free plan.

Receiving a steep medical bill — particularly for an unplanned procedure — can be a harrowing experience. Most patients don’t realize, however, that medical charges can be negotiated just like any other service, even if you have health insurance. While it is a time-consuming and often complex process, you have the potential to save thousands of dollars, avoid debt and protect your credit score by negotiating the bill. While negotiating up-front is easier than after the procedure, you still have options for reducing your bill and managing your payments after receiving care.

Negotiating bills up front

If possible, negotiate fees before you have the procedure and incur the costs. Upfront research and discussions take time, but can save money. 

Identify the fair market value

If you are planning for a medical procedure, research its fair market value, or how much hospitals accept from insurance companies as payment for the procedure. Compare various insurance company and online medical valuation websites for a rough estimate of costs.

Research discounts

Call your medical provider to see if you qualify for any cost reductions. Many providers offer income-based discounts, charity care discounts or deductions for paying in cash on the day.

Negotiating bills received

If you’re faced with an unplanned or emergency medical bill and are unable to pay, don’t immediately charge it to a credit card. Even if you have already received care, you can still negotiate a lower bill.

Don’t delay

Most medical providers sell bills to a collections agency after 90 days, hurting your credit score. Providers are more likely to work with patients who are not yet delinquent on their payments, so get in touch with them as soon as possible.

Check for errors

Don’t accept the medical bill at face value. Given the number of individuals who access and make changes to a medical bill before it is finalized, there is ample room for error. Some billing advocacy groups claim that as many as 80 percent of medical bills in the U.S. contain errors. Common mistakes include extra charges for services or medicine that was not received, a charge for a brand-name drug when a generic one was used, or a coding error that caused the insurance company to deem the treatment ineligible for coverage. Providers can also send medical bills prematurely before payments are received from the insurer. Check each individual charge to ensure they are accurate. If you have insurance, compare the bill against your explanation of benefits to make sure your insurance company has made its obligated payments. The provider is required to send you a fully itemized version of your bill, so request one if only a total sum is shown.

Ask for discounts

Similar to discounts available before getting treatment, you can ask for income-based, charity care or cash payment discount options after you’ve received care. If you don’t have insurance, check that you aren’t being charged more for treatment than an insurance company would be. Insurance companies often negotiate better rates with providers, which you can request to obtain as well. You might also be eligible for payment assistance through Medicaid or the Consolidated Omnibus Budget Reconciliation Act (COBRA). If the bill has already been sent to collections, you can still negotiate a reduction with the agency.

Consider hiring an advocate

Negotiating discounts with your provider takes time and attention to detail. If your recovery or other circumstances prohibit you from being able to manage it on your own, you might consider hiring a billing advocate to do the work on your behalf. Ask if your employer offers advocacy services as part of your healthcare benefits, and compare the costs of nonprofit and for-profit advocates. Typically, billing advocates will charge a percentage of the total amount that they are able to reduce off your bill.

Provider repayment plans vs. loans

Once you’ve established a fair billing amount, don’t start making payments on the total quite yet. Without a clear idea of your repayment conditions, your bill can potentially still be sent to a collector if you have an outstanding balance. Compare the cost of repaying directly to the provider, using a medical credit card, using a conventional credit card, or taking out a personal loan.

Payment through your medical provider

Paying your provider directly can be the most cost-effective arrangement if you can get an interest-free plan. You might also be eligible for financial hardship plans by providing proof of income, debt and other financial information. Be honest about what you can afford to pay each month, including any fees charged over the course of the plan.

Medical credit cards

If your provider does not offer an interest-free repayment plan, they might suggest that you take out a medical credit card. While many medical credit cards do not charge interest for an introductory period, if you fail to pay in full by that date the interest becomes deferred, not eliminated. Once the promotional period ends, interest is calculated and charged from the initial date you obtained the card, often at rates in the double digits. If you are confident you can pay the bill in full before the promotional period ends, a medical credit card could be useful. Otherwise, this is one of the most expensive ways to pay medical debt.

Conventional credit card

It can be tempting to charge a medical bill to your existing credit card, but the interest rates and late payment fees can easily snowball into a huge debt burden.

Personal loan

If you cannot obtain an interest-free repayment plan from your medical provider, taking out a personal loan is another option to pay off medical debt. Depending on your credit score, interest rates are typically lower on personal loans compared to credit cards. Compare lenders to see what rates you are eligible for, and make sure you understand all fees associated with the loan.

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