BeckyMedical bills. Did you know that medical debt is one of the top-rated reasons why people file bankruptcy?
According to CNBC, healthcare costs account for 66.5% of bankruptcies! It’s not hard to see why. Expenses add up when you factor in the cost of health insurance, medical bills and time off work due to major illness.
There are heartbreaking moments working in healthcare. It’s especially hard to work on an account of a patient who has already passed away and you’re getting calls from their loved ones wanting to work out arrangements to pay the remaining balances off.
I can’t fathom having a catastrophic medical issue arise and knowing I either a. didn’t have insurance to cover the costs or b. couldn’t afford the bills after my insurance paid their portion
That’s why today I’m going to let you in on the secrets I’ve learned while working as a medical insurance collector for the past 17 years.
Once your claim (visit) has been processed by your insurance, the leftover patient balance will be transferred to you and this is when you start receiving bills.
When you receive your first bill, you generally have 90 days before they start the pre-collections process. That’s why it’s best to get a jump on any patient balances you receive as soon as you get the bill.
Medical verbiage
Let’s get acquainted with some insurance lingo before we get started. I’m sure you’ve heard the insurance terms deductible, coinsurance and copay in relation to your medical statements.
A deductible is the out of pocket amount a patient owes on medical bills before their insurance will start paying on their claims. Your insurance will not pay on an insurance claim until you’ve met your deductible for the year.
Many times they’ll make an adjustment based on your insurance payor’s plan, but they will not pay on your medical claims until the deductible for the year is met.
For example, if you’re deductible is $1000 per year, you’ll have to pay $1000 worth of medical bills before your insurance will kick in and start paying on your claims. Once your deductible is met for the year, your insurance will begin paying on your claims and leave you with a coinsurance.
A coinsurance is the percentage of your medical bills that you and your insurance pay after you’ve met your annual deductible.
Let’s say your insurance plan is an 80/20 plan. That means once your deductible is met, your insurance will pay 80% of the charges on any given medical bill you have and leave you with the remaining 20%.
Lastly, you might owe a copay. A copay is different from deductibles and coinsurances because a copay is a set amount due at doctor visits, prescriptions and other medical procedures.
Now that we’ve learned some of the insurance terminology your insurance company uses, let’s look at ways to save and pay off medical bills without breaking the bank.
Plan procedures in advance if possible
If possible, plan your procedure or surgery for after your deductible has been met for the year.
As I stated above, once your deductible is met for the year, you only owe your coinsurance, as well as your copay for certain visits.
Unfortunately, many times we’re seen at clinics or hospitals for unforeseen illness. Although we can’t always plan for those instances (thank goodness for emergency funds!), we can plan for elective procedures that aren’t dire.
Assuming you’re planning to have a procedure done (ie-removal of mole/wart, cataract surgery, repeat cesarean section, knee/hip replacement), try to plan your procedure or surgery AFTER your deductible has been met for the year.
A great example of this is when I delivered our miracle baby boy. He was born in the winter, meaning we had the entire year leading up to his birth to meet our annual deductible.
With the various visits for ultrasounds, fetal nonstress tests and more, it was easy to meet our annual deductible by the time he was born. In meeting our annual deductible, we only had to pay the coinsurance for the labor and delivery, medications, etc.
Get an estimate prior to your procedure or surgery
When planning a procedure or surgery, it’s a great idea to ask for an estimate. Not only can you ask your provider for an estimate, but it’s never a bad idea to call your insurance as well and see if they’re able to give an estimate too.
First get an estimate from your provider’s office. While you’re getting an estimate from them, request the procedure codes that will be used to bill your procedure/surgery.
When talking to your insurance company, you can then ask how much they’ll pay for those specific procedure codes. Also, what percentage they’ll cover if you’ve met your deductible.
By doing some quick and dirty math, you should be able to make an educated guess on how much you’ll be left owing.
Request a discount if you pay your balance in full
This is one of the best unknown secrets. Although some healthcare organizations no longer recognize this discount, it’s still worth asking.
Some hospitals will approve a discount if you pre-pay a portion of your estimated balance in advance. If they estimate your final balance being $565 and you pay $200 upfront, they’ll offer a 10% discount.
More hospitals will approve a discount if you pay your balance in full after receiving your first statement. I’ve worked for 2 hospitals that have offered discounts when patients paid their balance in full. Both only offered 10%, but 10% is 10%! Take it!
It’s not uncommon for hospitals to offer 10-20% off a bill when you pay it in full.
Say you owed $725. If the hospital you were seen at offers a 15% discount for paying your bill in full, you’d only pay $616.25. That saves you $108.75! Imagine how you could use that $108.75 elsewhere!
Request a discount if you sign up for payment plan
If you have a medical balance that you can’t afford, ALWAYS ask if they offer a payment plan! (Bet you didn’t know that payment plans are a great option when paying off student loans too!)
Again, not all healthcare organizations will offer a discount, but when signing up for a payment plan, ask if they offer a discount.
See if you can negotiate your monthly payment down to a little less than you can afford. That way, any extra money you have can be thrown on your payment plan on top of your monthly payment amount! Get that medical balance paid off as fast as you can!
Apply for financial assistance program (charity care)
It’s still surprising to me that more people don’t know about this last “secret” to paying off medical bills.
If you or a family member receives a medical bill that is truly too much to pay, ask if they offer a financial assistance program and apply for it.
Financial assistance programs are incredible in helping patients that are financially in need, are uninsured or underinsured!
You can also mail a hardship letter like THIS ONE explaining that you’re unable to pay the balance enclosed based on your income or extenuating circumstances.
However, I recommend calling or going in-person. I wouldn’t want to take the risk of my important letter getting lost in the mail or being routed to an incorrect department.
Patients who qualify for financial assistance can have their bill reduced or even be approved for up to 100% forgiveness!
Each organization has a unique eligibility and enrollment process to their program, but most are processed on a handful of similar factors.
These factors generally include your family income (ie. paystubs or signed letter from employer), the number of family members in your household, the previous year’s tax return, recent bank statements, other bills/debts you owe and more.
My goal in writing this post to help YOU and others find ways to get the help they need in paying medical bills and getting out of medical debt. That way you can be on your way debt freedom and financial independence!
