Kimberly Palmer: How to handle your medical bills

content of the article

When she was 19, writer Emily Maloney was facing about $50,000 in medical debt after hospital treatment for a mental health crisis. Debt followed her into her twenties, damaging her credit score and resulting in stressful calls from collection agencies.

Your experience is all too common: The Consumer Financial Protection Bureau reports that about 1 in 5 US households has medical debt. People with medical debt are more likely to face anxiety, stress, or depression and avoid filling prescriptions because of the cost.

content of the article

content of the article

The risk of “medical debt threatens every consumer and impacts their lives,” says John McNamara, deputy director of consumer credit, payments and deposit markets at the CFPB. He adds that recent changes in the way medical debt is reported by credit bureaus should help consumers: medical debt that has been paid off will no longer appear on credit reports, and no new medical debt will show up until 12 months have passed ( before six months). Additionally, credit bureaus will stop reporting unpaid medical debt below $500 in the first half of next year.

Eventually, Maloney’s debt was settled through a combination of a helpful customer service representative and her state’s statute of limitations. Based on her experiences, she wrote a book called Cost of Living. She wants to reassure others who have medical debt that they can take steps to reduce it.

content of the article

“It takes time, but you can challenge the insurance company’s decision or ask (the provider) for a discount, so it’s worth a try,” she says.

In other words, consumers might have more power than they think. Here are some ways you can exercise that power over your medical debt.

CHECK YOUR INVOICE CAREFULLY

It can be tempting to toss a large bill in the trash in frustration. But Dan Weissmann, creator of “An Arm and a Leg,” a podcast about the cost of healthcare, recommends instead looking closely for mistakes made by the healthcare provider or the insurance company.

“It’s an unfair amount of homework for us because if you find an error, you have to complain and invest your time, but some medical bills contain errors,” he says.

Weissmann says it’s also worth checking your rights under the No Surprises Act, which came into force in January 2022 and protects consumers from some types of unexpected medical bills.

content of the article

ASK YOUR PROVIDER FOR ASSISTANCE

Many hospitals offer financial assistance to those who meet income thresholds. “If you get an amount that you weren’t expecting, call the hospital and ask, ‘Am I entitled to a discount? What is your policy on financial assistance?” says Richard Gundling, vice president of the Healthcare Financial Management Association , a coalition of financial managers in the healthcare industry.

Hospitals often have “charity care” policies to grant a lower rate or even forgive the debt altogether, but consumers may have to be aggressive when asking for it. Eligibility for the programs varies by state and by hospital, but nonprofit hospitals must have financial assistance policies. Hospitals may also offer payment plans, giving you more time to pay.

content of the article

Hospitals can also connect you to financing options like personal loans and medical credit cards, which can be helpful but also come with risks. The CFPB’s McNamara warns that credit cards, for example, may incur additional interest.

BE LASTING AND GET SUPPORT

Lorraine Coughlin, President of LMC Medical Claims Management in West Palm Beach, Fla., helps people file medical bills with insurance companies to make a living. She says the number one strategy is persistence.

“You have to make calls and ask questions. Don’t just pay when you get a surprise bill,” she says. Sometimes it can take an hour or more, but making that call can save you thousands of dollars, she says.

Medical billing advocates like Coughlin can do this work for you, but they usually charge a fee and a percentage of the savings. McNamara warns that there are criminals who call themselves accountants or consumer advocates, but in reality they could take your money without providing any real support. He recommends doing some research before giving out personal information or paying any fees upfront.

content of the article

If you are having trouble getting satisfactory answers from your insurance company and are employed, Gundling recommends reaching out to your company’s welfare contact for help. “You can be your advocate,” he says.

Get ready for the next medical bill

The ideal time to start working on managing medical debt is before you have it, Gundling says. With the advent of high-deductible health insurance plans, even insureds are increasingly faced with expensive bills, making an emergency fund even more important.

“If you know you have a plan with a high deductible, you have the money in the bank,” he says.

You could try putting money aside with automatic deposits into a high-yield savings account, or take advantage of a flexible health savings account if your employer offers one.

content of the article

Similarly, Gundling suggests asking questions about what your insurance covers and what providers are in the network before seeking care, if possible.

The bottom line is that tackling medical debt, not ignoring it, can be your best hope of eventually getting over it like Maloney did.

———————————————————————-

This column was provided to The Associated Press by personal finance website NerdWallet. Kimberly Palmer is a personal finance expert at NerdWallet and the author of Smart Mom, Rich Mom. Email: kpalmerâ†*nerdwallet.com. Twitter: â†*KimberlyPalmer.

RELATED LINK:

NerdWallet: How to Pay Off Your Medical Debt: 6 Options https://bit.ly/nerdwallet-pay-medical-debt