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Updated on Thursday, October 22, 2020
Health problems put a strain on your quality of life, and that stress can be amplified by unmanageable medical bills. In many cases, however, it’s possible to get hospital bills reduced so that at least some of that debt is forgiven.
The best way to appeal for medical bill debt forgiveness is to get in touch with your hospital’s billing department. From there you’ll be able to see if you qualify for any debt-reducing strategies like financial aid programs or discounts on your medical bill.
How to ask for medical debt forgiveness
It’s normal to feel stressed or worried if you receive a hospital bill in the mail that you can’t afford to pay. But you’re not alone: About a quarter (26%) of Americans reported difficulty paying medical bills, according to a 2016 Kaiser Family Foundation survey.
Hospitals are used to dealing with patients who can’t afford to pay an entire medical bill, which is why they often offer a variety of ways to reduce medical costs, such as:
- Financial assistance for patients who are uninsured or underinsured
- Discounts for paying upfront
- Interest-free payment plans
If you plan to ask your hospital for help reducing your medical bill, consider taking the following steps:
1. Check your hospital bill for errors
Medical bills can often have errors, so carefully check your bill first before asking for any kind of reduction. After you receive your care, you’ll receive a bill from your hospital and an Explanation of Benefits (EOB) from your health insurance company. An EOB is not a bill — it’s a statement from your insurer that details what the medical services cost, how much your insurer covered, any discounts you received and what you might eventually owe to your provider.
To check for potential errors, ask your hospital’s billing department to send you an itemized bill for your care. It should list each procedure you received, as well the appropriate insurance billing code. Check this bill against both the original bill you received and the coverage you receive with your insurance plan.
To see what your plan covers (or doesn’t), ask your insurer for a Summary of Benefits and Coverage (SBC), as well as a copy of the glossary of health care terms that insurers are now required to provide to consumers. The SBC should spell out your share of the costs for any medical service you received (your coinsurance), any deductible you might need to pay first and possible copays, as well as your out-of-pocket payment limit.
Here’s a quick look at the documents you’ll need to either confirm or dispute the cost of your medical service:
|Documents from your hospital provider||Documents from your health insurer|
Your hospital may have billed you in error if…
- You were charged for preventive care.
- Your insurance denied a claim they should pay out.
- You were double-billed.
- Your service was coded incorrectly.
- Your personal information or insurance information was entered incorrectly.
If you discover you were charged for a service that’s covered by your plan, contact your insurer right away. If you disagree with your insurance company’s decision not to cover a certain service, you should also submit an appeal as soon as possible. To learn more about your insurer or to file a complaint, contact your state’s insurance commissioner.
2. Ask your hospital if you qualify for financial aid
Federal law requires nonprofit hospitals to offer financial assistance programs, as well as information on how to apply for help. Eligibility criteria for these programs, however, is at the discretion of the hospital.
About half of all states have laws that spell out the type of financial assistance a hospital needs to offer, as well as who, according to family income, is eligible to apply, according to the National Consumer Law Center.
The laws vary according to the state, but they typically mandate that hospitals need to provide assistance like free or reduced-cost care, or an interest-free payment plan, to patients who are uninsured or whose income is at or below the federal poverty level (FPL). The current FPL for a family of four is $26,200 for residents of all states (except for Alaska and Hawaii) and the District of Columbia.
See the chart below for a look at how some states determine who qualifies for lower-cost medical care, based on a four-person household.
|Who qualifies for lower-cost medical care?|
|California||Free or discounted care for patients at or below 350% FPL (now $91,700).|
|Colorado||Discounted care for uninsured patients at or below 250% FPL ($65,500).|
|Connecticut||Free or discounted care for uninsured patients who do not qualify for Medicaid, Medicare or other coverage, and who are at or below 250% FPL.|
|Maryland||Free care for patients at or below 200% FPL ($52,400). |
Discounted care for patients between 200% and 300% FPL ($78,600).
|New York||No more than a nominal fee charged to patients who are at or below 100% FPL. Discounted care for patients between 100% and 300% FPL.|
|Washington||Free care for uninsured patients at or below 100% FPL. |
Discounted care for patients between 100% and 200% FPL.
|FPL = Federal Poverty Level. Click here for the current FPL guidelines.|
3. Negotiate your own settlement with the hospital billing department
If you don’t qualify for financial aid at your hospital — and still can’t afford the cost of care — consider negotiating your bills with the hospital’s billing department. More than half (57%) of consumers who tried to negotiate their medical bills were successful, according to a 2018 survey from Consumer Reports.
To negotiate medical bills, try these tactics:
- Offer to pay a discounted amount upfront in a lump sum, and say you’ll do it immediately. Example: “I’m prepared to pay this bill today for a 25% discount.”
- Compare the cost of the service you received to prices listed either by your insurer, or those listed at a third-party website like Healthcare Bluebook. If you’ve been overcharged for a service, you can use it as leverage.
- Be transparent about why you’re asking for help. If you’ve recently lost your job or suffered a sudden change in health care needs, your hospital will probably be more willing to negotiate.
Paying off your medical bills
Enroll in an interest-free payment plan
Your hospital may be willing to break your hospital bill into more manageable, interest-free monthly payments without a credit check.
Keep in mind that if you do enter a payment plan, you may no longer qualify for the discount you would have received if you had paid off your entire bill in a lump sum. These payment plans may also require that the debt be repaid in just one or two years, although some hospitals offer longer terms.
Be honest: Do not agree to a hospital payment plan if you can’t afford the monthly payments or require a longer loan term.
Pay with a 0% APR credit card
It’s possible to pay medical bills with a credit card, but keep in mind that the average credit card APR on interest-bearing accounts was 16.98% in 2019, according to the Federal Reserve. The exception: If you qualify for a credit card with a 0% APR introductory offer, you might be able to pay off your hospital bill over a longer period of time without paying interest. These offers typically last up to 18 months and are reserved for borrowers with good credit.
Another option to consider is a medical credit card. CareCredit® credit card, for example, lets you spread out hospital bill payments while paying a lower interest rate, or a 0% APR for smaller hospital bills less than $1,000.
To take advantage of either option, you’ll need to make regular minimum payments toward your account and also pay it back in full before a special financing period ends. For a 0% APR, you’ll also need to pay your account back within six to 24 months to avoid paying the deferred interest that began to accrue once you began charging hospital expenses.
|CareCredit® credit card quick facts|
|What is it?||CareCredit® credit card is a medical credit card that offers special financing options, at either a lower interest rate or, for smaller bills, a 0% APR.|
|How does it work?||Your provider may advertise the CareCredit® credit card as a way to more affordably finance your medical procedure. Not all providers offer financing through this credit card, so be sure to ask before trying to open a card.|
|Special financing options*||Depending on the size of your medical bill, here is what you may pay in interest:|
|Regular purchase APR||26.99%|
|Fees||Annual fee: $0|
Late payment fee: Up to $40
|Risks||You’ll need to keep up with minimum payments. With a 0% APR promotion, expect to pay deferred interest at a 26.99% APR if your balance isn’t paid off before the promotion ends.|
|*Special financing offers valid as of Oct. 21, 2020|
Get a personal loan
Personal loans can be used to pay for virtually anything, including medical bills. When you take out a personal loan, a lender gives you a lump sum that you repay monthly at a fixed interest rate over a set period of time. Since your payment is a fixed amount, you’ll always know how much you owe every month.
The biggest drawback to using a personal loan to pay for medical bills is that the lowest interest rates typically go to borrowers who have good-to-excellent credit. Here’s what else you should know about this payment option:
|Using a personal loan to pay for medical expenses|
|Fast funding. Avoid your hospital bill being sent to collections.||Interest. Lenders charge interest, while hospitals may offer interest-free payment plans.|
|Usually no need for collateral. This means you don’t risk losing assets if you default on the loan.||Fees. Some personal loan lenders charge an origination fee, typically 1% to 8% of the loan amount.|
|Predictable payments. APR and monthly payments are fixed.||Increased debt load. You risk taking on even more debt.|
What happens if you don’t pay medical bills?
It’s a myth that you can pay as little as you wish on a hospital bill without consequences. If you don’t pay your hospital bill, you can expect:
- A drop in your credit score. Once a bill is delinquent, your hospital will likely turn it over to a collection agency, and after 180 days, the agency may report that information to the three major credit bureaus. Even for a small bill, your score could drop by as much as 100 points.
- Unwanted requests to pay up. Debt collectors are typically far more persistent than medical billing offices in trying to collect unpaid debt.
- A possible lawsuit. It’s less likely you’ll be sued over a delinquent hospital bill than another type of consumer debt, like an unpaid credit card. Still, if you’re successfully sued over medical debt, expect consequences, like a possible garnishment of your wages or bank account until the balance is paid off in full.
If you can’t afford a medical bill, don’t wait until you’ve faced any of the situations above before taking action. Hospitals are often willing — and in many cases, required — to work with patients who can’t afford the cost of care. Get in touch with your health care provider as soon as you receive an unmanageable hospital bill, to work out a solution that doesn’t harm your finances or credit score.