What is the best way to deal with medical debt?
March 2, 2011 6:39 AM   Subscribe

A few months ago, I was hospitalized several times and ended up with a slew of medical bills that total close to $90,000. Insurance has fortunately paid off most of it, but I am still left with about $5,000 in bills to a variety of hospitals, doctors, and services that I am responsible for. I do not have great credit, so I don't have a credit card I can just charge these bills to. I do not have much in savings, about $1,000. How can I make the best of the situation?

Of the $5,000, I can probably pay off $1000 in the next few weeks. What is the best strategy to pay the bills that are too large immediately for me to pay? Call the billing offices individually and ask for a reduction? Ask if I can set up a payment plan? And do I tell them what I can afford to pay each month?

I've had friends who said don't even bother calling them. Just pay them off $10 a month. But I don't want to spent the next 20 years of my life paying off medical debt.

I have just spent the last 10 years of my life paying off other debts. Until this happened, I only owed $3500 left out of what once was $10,000 in credit card / student loan debt and I was finally starting to see the light at the end of the tunnel and feeling proud of myself. Now this. $5,000 just seems devastating to me, on top of the worries I already have about my own health. I don't want to get into even more of a financial mess, so please. Help. Me. Cope. (This is in the USA.)
posted by anonymous to Work & Money (19 answers total) 6 users marked this as a favorite
First off, don't put this on a credit card. You'll just end up paying usorious interest on top of the hospital bills.
Call the hospital. Start by calling and asking to talk to a social worker. Most medical practices and hospitals should have someone on staff who can help you to lay out all of your problems and to put your life in order. Then call billing and ask for help setting up a payment plan.
posted by pickypicky at 6:45 AM on March 2, 2011 [3 favorites]

Yeah, call the hospital. It's entirely possible that they'll take $1000 and write the rest off. They do this sort of thing routinely, as settling is way less expensive than sending the thing to collections, and they get money now instead of in five years.
posted by valkyryn at 6:49 AM on March 2, 2011 [1 favorite]

Yes to the payment plan mentioned by pickypicky. You can also see if they will cut their bill for you. Many medical providers will do this.
posted by murrey at 6:50 AM on March 2, 2011 [1 favorite]

Jesus, don't put this on a card if you can't pay that card off in full at the end of the month. That sort of behavior is slow financial suicide, second only to borrowing it from a loanshark as the worst possible approach.

Go talk to the hospital - pickypicky has it right, the hospital has heard this story before, and they can help you set up a payment plan that's achievable. Do your best to work with them in good faith, and they'll likely do theirs to try and help you.

If they do that and it works out, you might consider volunteering there now and then if you can.
posted by mhoye at 6:53 AM on March 2, 2011

Many hospitals have payment plans for people in this position.

You can definitely call the billing department and ask what your options are.
posted by zizzle at 6:54 AM on March 2, 2011 [2 favorites]

You'll get better advice than I can give about the medical bills, but I wanted to point out that you should still feel proud of yourself. This doesn't obviate the achievement of paying down $10,000 in credit card debt. If this catastrophe had happened when you were still under those bills, you'd be stuck with the bills while still servicing the credit card debt, and the situation would be even worse.
posted by endless_forms at 6:54 AM on March 2, 2011 [5 favorites]

I wouldn't touch the $1000 in your savings account. That's your safety net. You can definitely negotiate with the hospital and get it reduced, so start there. Set up a payment plan on the reduced amount and you should be able to get it cleared up within a year. Good luck! And congratulations on your debt reduction so far -- that's amazing.
posted by kate blank at 7:04 AM on March 2, 2011 [5 favorites]

As a nurse in a hospital out-patient practice, I've seen many patients in this situation. Patients, after discharge, share anxiety about co-pays or balances. Many speak highly of the cooperative atmosphere they encounter in the hospital Financial Services (Patient Finances, whatever - names vary). It is common, even expected, for patients with balances like this to set up a payment plan. I've never heard of them voluntarily offering to write off most of the balance, but payments of $50.00 per month, or even less, are routine. I think your best bet is to make the first move and call them.

I understand, though I'm not a finance expert, that hospital debt can now be reported to credit agencies, though I believe this was not the case in the past. That said, it is cheaper for hospitals to enter into payment plans than to sell off uncollectable debt, and it saves your credit score.
posted by citygirl at 7:06 AM on March 2, 2011

"Call the billing offices individually and ask for a reduction? Ask if I can set up a payment plan? And do I tell them what I can afford to pay each month?"

This. Except be at least a little cagey about what you can afford to pay since you're negotiating.

My husband did collections for a hospital for quite a while. He ABSOLUTELY wanted to settle for a reduction or a payment plan. There are two kinds of people who end up in hospital collections: People who are poor or whose savings have been wiped out by medical treatment and it's really sad and nobody wants to wring blood from a turnip; and assholes who transferred the Porsche into mom's name before defaulting on all their medical bills. That's it. Only two types. You're type one. The hospital WANTS to work it out with you, and may have charity programs in place for people in your situation.

Note that in general larger hospitals are more likely to be able to work with you or have charity programs in place than smaller offices or individual doctors. I'd probably call through my list and see what they could do for me before committing to anyone's payment plan, in case you run up against someone really intractable. If this is too stressful, maybe you have a friend who can actually make the calls while you sit right there for the inevitable moment when they say "we have to talk to the patient." If you were my friend I'd make those calls for you. :)
posted by Eyebrows McGee at 7:11 AM on March 2, 2011 [3 favorites]

From personal experience:

Several years ago I was hospitalized in Maryland. My care cost a total of about $14000. My medical insurance covered about $10000, so I needed to pay the rest out of pocket. The reason I was hospitalized in the first place was that I didn't have much money and waited too long to treat an issue that could have been taken care of easily. I was very anxious about being unable to pay off my medical expenses. I spoke to the financial counselor at the hospital, and she directed me to their charitable care program. I put together a small package of documents about my personal and financial situation. Several weeks after submitting the documentation, I received a note telling me that I didn't have to worry about paying for my care.

I hope you can reach a similar arrangement with your care providers.
posted by Nomyte at 7:22 AM on March 2, 2011 [2 favorites]

I had a bill of around $1500 and when I called and asked if I could pay it off at $75 a month they sounded surprised that I would offer that much. Definitely give them a call and low-ball them on payments to start.
posted by ghharr at 7:24 AM on March 2, 2011 [1 favorite]

Yeah, do not feel bad pushing for as much as a 50% reduction in the bills, then set up a payment plan. you can negotiate this like any other service, sorta (you already got the service at retail price but you should be getting the lowest price people pay after insurance if you are not already).

Be aggressive. Lowball them and let them make a counter offer. Have numbers ready before you call about the typical cost of XYZ medical test or whatever and make sure they are charging within a reasonable range for your area. Do not tell them how much you have in savings. Just have a number in mind for what you could reasonably pay every month and find out if the amounts on your bills are the 'retail' prices for those services or the rate an insurer would pay.
posted by slow graffiti at 7:34 AM on March 2, 2011

Anecdata: Was in the hospital in December, had to pay $3300 of $12000. The hospital will automatically set up payment plans for anyone who has a bill between $100-5000. Over $5000? Call them.

In other words, call them. Remember, of the $90,000 they already got $85,000. They'll help in one way or another.
posted by Mister Fabulous at 8:14 AM on March 2, 2011

I had a bill of about $1000 last year and called up the doc's billing office with trepidation. They couldn't have been more matter-of-fact about setting up a payment plan on the spot. No interest charges on top, either.

I didn't offer to pay $xxx a month for xxx months -- I just asked what was available, and the first offer they gave me was just right. So ask them very generally first, rather than saying "I can give you $1000 a month for xxx months." If they say they want more per month than you can reasonably afford to pay, push back.
posted by vickyverky at 8:42 AM on March 2, 2011 [1 favorite]

What everyone else said--my mom works in medical billing and they write off much larger amounts than that all the time, and setting up payment plans is absolutely typical. They'll just be glad to be talking to someone that doesn't scream obscenities at them. (Don't do that.)
posted by tchemgrrl at 9:24 AM on March 2, 2011

Also, go through your bills and make sure the insurance company didn't accidentally underpay, and also make sure that everything was submitted, so that you have the lowest bill possible. Good luck, I hope you're okay, and congratulations on paying down your debt.
posted by theora55 at 10:05 AM on March 2, 2011 [1 favorite]

I just want to add that all of the payment plans from hospitals that I have been on were INTEREST FREE - something you may not have realized since you come from the credit card debt battleground.
posted by WeekendJen at 3:07 PM on March 2, 2011 [1 favorite]

The risk you take by calling them is having them say "I can't accept less than (say) $75 a month." They'll SAY that but just don't agree to it (tell them you'll call back when you think it over, and just don't call back) and you can send them as little as you can afford. You could pay $20 a month until you can afford more... doesn't mean you'll be spending the next 20 years of your life paying off medical debt. Do try to negotiate the total down though.
posted by IndigoRain at 5:10 PM on March 2, 2011 [1 favorite]

From the OP:
Thanks to everyone who has been so encouraging and helpful. I checked again and my actual debt is closer to $6,000, not $5,000. Even so, there is some good news (kinda).

I spoke with one of the hospitals today, and they reduced one of my bills from $995 to $500 if I could send that in the next two weeks. What I thought was an ambulance bill of $1419 was just a statement, I only actually owe $292, and when I talked to them, they were okay with $25 a month payment. I will make other phone calls in the next few days and keep my fingers crossed.

I'm going to try the "snowball" method for now - tackling the smaller 2 or 3 bills under $300, paying them off, and putting those payments towards the larger bills of a couple of thousand next.

I have tears in my eyes as I write this because I feel a huge sense of relief in knowing that this debt IS going to be manageable, and the kind Mefites who have been in my shoes responded with words of encouragement gave me hope that it WILL be okay. Thank you.
posted by jessamyn at 12:21 PM on March 3, 2011 [1 favorite]

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