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Updated on Friday, October 19, 2018
Here’s a little secret that many hospitals don’t want you to know: the bill they send you is only an initial offer.
There is almost always room to negotiate, and in some cases you can get your bill reduced by as much as 90% — or forgiven entirely.
All it takes is knowing who to ask.
Hospital financial assistance
You may not have known that many hospitals — nonprofits in particular — have financial assistance programs designed to help people pay for medical care they couldn’t normally afford.
And there are two situations where you’re especially likely to qualify.
1. You’re uninsured
The first situation is if you’re uninsured. Often, simply being uninsured can result in an automatic bill reduction, no matter your income. Those with lower incomes may qualify for even bigger reductions.
Keep in mind that this isn’t necessarily a reason to go without insurance. Insurance comes with many protections, such as a maximum out-of-pocket cost and pre-negotiated rates for procedures that reduce the cost without any work on your end. Not to mention you avoid penalties for being uninsured.
2. You owe a significant amount after insurance
The second situation is if you are insured but your insurance only covers part of the cost. The lower your income and the more of your bill for which you’re responsible, the more likely it is that you’ll qualify for help.
3 forms of financial assistance
If you find yourself in one of the above situations, there are three forms of financial assistance for which you may be eligible.
1. Bill reduction or forgiveness
The first is a bill reduction or potentially total forgiveness. This Redditor got a $12,000 bill reduced to $1,500 by contacting the hospital’s billing department — and there are other stories in the thread from people with similar experiences. In general, the more difficult your circumstances, the more that part of your bill may be forgiven.
2. Personal loans for medical debt
If you have medical debt that cannot be resolved with the hospital, you may consider taking out a personal loan to cover your medical bills. A personal loan could give you a year or longer to pay off your medical debt.
If you are already making payments on several medical bills, you could use a personal loan to consolidate them. That would allow you to make one payment per month on your debt instead of multiple payments. Doing so could also reduce the interest you pay on your debt.
While personal loan lenders generally don’t have specific refinancing programs for medical debt, they’ll likely let you use the loan funds to do so.
If you have a stable work and education history and a good FICO score, a personal loan may be the right fit for you.
To compare lenders and receive offers, you can explore MagnifyMoney’s personal loan marketplace. You can filter lenders by your credit score, loan amount and ZIP code. Many of the lenders you’ll find in this marketplace have no origination fees, prepayment penalties or other hidden fees. And some lenders, such as LightStream, offer fast application processing, meaning that same-day funding could be available. Use our table below to compare up to 5 lenders! Clicking “see offers” does not affect your credit!
Compare Personal Loans for Medical Debt
If you have poor or no credit, you may only qualify for high rates on personal loans. In that case, you may need to reconsider your options. Weigh the cost of a personal loan before committing. You don’t want to replace your medical bills with debt that is difficult to repay.
3. 0% interest repayment plan
The other type of help that most hospitals offer is a payment plan with 0% interest. These programs are often offered without any eligibility requirements, meaning anyone can enroll. And while they don’t reduce your bill, they can make it easier for you to afford the expense by spreading out the cost over a period.
In some cases, you may qualify for a bill reduction and a 0% interest payment plan.
If your hospital does not offer a payment plan but does accept credit cards, you can consider applying for a card with a 0% intro APR on purchases.
Check out these cards:
How to get financial assistance from the hospital
To see whether you qualify for financial assistance, the best thing to do is reach out to your hospital as quickly as possible once you have your bill in hand.
“Just ask,” said Pam Horack, CFP® and founder of Pathfinder Planning. “I have found that if you contact the hospital billing department about payment, they are more than willing to work with you.”
Thomas Nitzsche of Clearpoint Credit Counseling Solutions agreed. “Act immediately upon receiving the bill and contact the billing department of the provider and ask to apply for financial aid, even if you think you make too much,” he said.
Figuring out who to ask
To figure out who to contact, look at your bill. There should be a phone number for the billing department on it, and you can call and ask about financial help. If that doesn’t work, Google “your hospital” + “financial assistance.” That should bring you directly to its financial assistance program with contact information to get you started.
From there, follow the instructions and provide the information needed. Though Melanie Lockert, the founder of Dear Debt who three years ago had a $1,600 bill forgiven, acknowledges that the process can take some time.
“I was grateful that they covered everything, but I did have to hand over a lot of information: bank statements, tax info, pay stubs and any other documentation to help my case,” Lockert said. “It took about two months for me to get the letter saying that everything was covered.”
If you run into any issues or are having trouble understanding your bills or organizing your financial situation, you might consider reaching out to a nonprofit credit counseling service for help. The National Foundation for Credit Counseling is a good place to start.
How to negotiate your medical bills
What if you don’t qualify for a bill reduction, or the bill isn’t reduced by as much as you’d like? What are your options?
Pay in cash (or with a flexible spending account)
You may be able to negotiate a lower bill, especially if you can pay upfront with cash.
“Sometimes doctor offices, hospitals, labs and other medical facilities will offer a discount if you pay your portion of the bill in full,” said Shanda Sullivan, CFP® and founder of Sullivan Financial Strategies. “I myself and a client have saved 5% to 10% off of our medical bills. It never hurts to ask.”
Horack added: “When I have had large bills, I called and asked if I could get a discount for paying cash. They reduced my bill by 20% and I paid with my FSA (flexible spending account).”
Research pricing at other hospitals
Another strategy is to research the average cost of the care you received using sites such as Healthcare Bluebook — or even call other local hospitals. If your hospital is charging you more, you could use that information as leverage for getting your bill reduced.
The bottom line is this: You have options when it comes to reducing your hospital bill. Often, the simple act of asking can save you a lot of money.