We read recently that one of the main reasons why people end up with a staggeringly huge pile of debt is because of big medical bills. It’s also one of the top reasons why people declare bankruptcy. We can emphasize. We had a procedure done last year to one hand where our co-pay was more than $600. If it hadn’t been for insurance, that 20-minue procedure would have cost us $6,500.
If you’re hit with thousands of dollars in co-pays the first thing you should do is check the website http://hrsa.gov/ which is that of the Health Resources and Services Administration. You can use this site to see whether your surgery was performed in a hospital covered by the Hill-Burton Act. This act mandates that nursing homes, clinics, hospitals, and other such healthcare facilities that have taken money from the government must provide reduced-cost or free services to patients as a pay back for the money they received. While this program has had no funds such 1997, some of these organizations are still obligated to provide their services free or at reduced costs if you fell below the poverty line.
If the facility is listed
If you see that the facility where you had your surgery is listed on this website you could apply for the free or reduced-cost services. You can still apply after you’ve received its services or even after your bill has been sent to a collection agency.
Communicate with your service provider
You should write a letter to the hospital, doctor, lab or clinic that provided your services before your bills become past due. Describe your financial condition and ask that your co-pays be eliminated and for it to consider that your bill is completely paid off. Be sure to include an explanation of your insurance benefits to remind your provider that insurance has covered the majority of your costs. Try to address your letter to the person that was responsible for your care and not to a billing agent or the medical practice.
If you can’t get your co-pays waived
In the event that your provider won’t agree to waive your co-pays you will need to write a second letter and ask to pay your balance in monthly installments. Be sure to include the amount you could afford to pay each month. Explain how you arrived at whatever amount you are proposing.
If you owe a large number of providers
The harsh fact is that if you owe a large number of providers it’s unlikely that you will be able to reach a workable solution with all of them. This is due to how medical billing and the collection process works these days. If you are unable to get all your co-pays waived and you will owe thousands of dollars, there are other solutions.
- Debt consolidation loan
- Credit cards
- Debt settlement
- Negotiate with your providers
- Find a foundation
- As friends and family members for help
- Declare bankruptcy
Many providers will negotiate
Many hospitals, clinics and doctors will negotiate, especially if you can pay cash. One of the dirty, little secrets of healthcare is that providers often bill for more than the procedure actually cost. We’ve seen cases of where a hospital billed a service at $5,500 but the person who received it was able to negotiate the bill down to less than $2000 by offering to pay cash.
Borrow the money
One good way to handle those huge co-pays would be to get a debt consolidation loan to pay them off. This would forestall the bill(s) from going to collection and would be much better for your credit report and score. If you owed $20,000 or more you might have to get a secured loan in the form of a refi, second mortgage or home equity line of credit. You should be able to get one of these loans at an interest rate of 5% or even better. You would probably end up with a fairly low monthly payment as well.
Use your credit cards
While this would not be an “optimal” solution it, too, would keep your bills from going to collection and keep your credit score from plummeting. Depending on how much you owed, you might have to spread your total out over several cards. You’d likely have a much higher interest rate than if you were to get a secured loan but would have more flexibility as to how and when you paid back the money.
Negotiate with your providers
Many Americans facing huge medical bills have turned to debt settlement for relief. This is where you negotiate with your providers to get your debts reduced. If you’re a skilled negotiator, you may be able to get your medical bills reduced by thousands of dollars. If you’re not familiar wit debt settlement, here’s a short video that teaches how to do this.
File for bankruptcy
If you can’t find any other solution to those huge medical bills you could do what many Americans have done and declare bankruptcy. A chapter 7 bankruptcy would discharge most of your unsecured debts such as your medical bills, credit card debts and personal loans. However, a bankruptcy will drop your credit score by probably 200 points, making it very difficult for you to get new credit for as many as three years. Plus, it will stay in your credit report for up to 10 years and in your public record for the rest of your life.