How to manage medical expenses

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.

“Health care debt risks haunt all consumers and affect their lives,” said John McNamara, assistant director of consumer credit, payments and deposit markets at the CFPB. Recent changes to how health care debt is reported by research agencies should help consumers, he added. Paid medical debt will not appear on your credit report, and new medical debt will not appear until 12 months have passed (up from 6 months). Additionally, in the first half of next year, credit bureaus will stop reporting 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 you can challenge the insurance company’s decision or ask[the provider]for a discount. It’s worth a try,” she says.

In other words, consumers may have more power than they think.There are several ways to wield that power over you medical debt.

Check your bill carefully

It’s tempting to shove large bills in the trash in frustration. We recommend that you check it.

“If you find a mistake, you have to complain and take your time, but some medical bills are wrong,” he said.

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 that you didn’t expect, call the hospital and ask, ‘Do I qualify for a discount? What is their policy regarding financial assistance?'” HealthCare Association of Industry Finance Executives.

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 said.

Prepare for your next medical bill

The ideal time to work on dealing with medical debt is before it happens, according to Gundling. With the rise of health insurance plans with high deductibles, even those with insurance are increasingly faced with high bills, making emergency funds even more important.

“If you know you have a plan with a large deductible, have cash in the bank,” he said.

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.”