Dealing with medical debt: Part 2

Negotiating bills and seeking assistance.

In the previous article in this series, we covered the importance of reviewing all medical bills, getting organized and responding to medical bills right away. The Consumer Financial Protection Bureau (CFPB) estimates that of the 43 million consumers who have debt in collections, they also have medical debt. Unmanaged debt can negatively impact your credit score. This is important since credit scores affect so many aspects of our daily lives, including: the ability to get a job, rent an apartment, insurance premiums and the ability to pursue additional credit (i.e. an auto loan or mortgage). This article will cover possible strategies for negotiating medical bills and seeking assistance.

So, what can consumers do to better manage medical debt? The CFPB suggests the following tips:

  • When possible, negotiate your bill or seek assistance. In regards to hospital bills consider the following: some may be willing to reduce your bill if you pay the whole amount up front; ask if you could receive the same rate as patients who have insurance; ask if you could arrange to pay off your debt in installments with no interest: and if you are unable to pay your bill, some hospitals have assistance programs such as “charity care” or foundations, so be sure to ask about applications and due dates.
  • Don’t use credit cards for medial debt if you can’t pay it right away. If you put large medical expenses on a credit card that you can’t pay off right away, you will be charged high interest rates for those charges. Also, this debt will look like “regular” debt to creditors. It is recommended that you attempt a repayment plan with your provider with little or no interest.

Other things to consider:

  • Obtain a free copy of your credit report from all three credit reporting agencies (Experian, TransUnion and Equifax) on an annual basis. You can obtain copies of all reports by phone (877-322-8228) or online (i.e. you can complete the application on-line or download the application and mail it to: Annual Credit Report Request Service, PO Box 105281, Atlanta, GA 30348-5281). By obtaining copies of all credit reports on an annual basis you are able to see your credit history, identify any potential errors and take the necessary steps to remedy such errors. To learn more about disputing errors on credit reports visit the Federal Trade Commission.
  • For future medical services make sure you know what your insurance covers and what is doesn’t cover. Also, be sure to inquire if your insurance company requires a pre-authorization form from your medical provider prior to a medical procedure or service.

For a variety of financial resources, including how to develop a monthly budget, visit Michigan State University Extension or MI Money Health

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