How to clear medical debt

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1. They were stuck in a Mexican hospital with an unpaid bill until Tyler Perry came to the rescue

This is probably one of the most insane medical insurance stories we’ve heard … Couple Tori Austin and Stephen Johnson were on vacation on a Carnival cruise. Johnson fell ill, so the couple went to a Mexican hospital for Johnson to receive treatment. However, they got stuck in the foreign hospital when they weren’t able to pay the $14,000 medical bill.

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The couple didn’t have travelers’ or health insurance, hence the astronomical medical bill. Austin said she tried to work out a payment plan with the hospital but was refused. It was movie star Tyler Perry that rescued the couple from this terrifying situation, says a November 2019 article in PEOPLE by Maria Pasquini.

NEXT: A whopping amount of Americans have debt caused by unpaid medical bills. 

2. One in 5 Americans suffer from medical debt

The expression that Dr. Perry Cox from Scrubs is wearing is the same face we made reading that stat! “According to a survey published this month in the American Journal of Public Health, nearly 60 percent of people who have filed for bankruptcy said a medical expense ‘very much’ or ‘somewhat’ contributed to their bankruptcy,” writes Olga Khazan in a 2019 article in The Atlantic.

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One-third of cancer survivors participating in a 2016 study in Health Affairs indicated that they’d gone into debt because of medical bills. Can you imagine — being broke on top of being sick?

NEXT: You might not have to pay attention to the first bill that arrives in your mailbox.

3. Wait for the ‘real bill’

Providers will sometimes send a bill before services are processed by insurance, Arthur Abbie Leibowitz, M.D., of employer benefit firm Health Advocate Solutions tells Consumer Reports. “It’s so confusing that many people pay what they don’t owe, while others wait too long after they get an overdue notice,” he says.

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Instead of jumping for your wallet, wait for an Explanation of Benefits from that date of service to arrive. It may be nerve-racking to have unpaid medical bills laying around, but they can stand to wait a little.

NEXT: Don’t ignore medical bills or else this might happen …

4. Nip issues in the bud quickly

Don’t be like the titular character in Nurse Jackie, who didn’t nip issues at work quickly. If you wait a little too long to pay your bill, some pretty sketchy things can happen … For instance, your unpaid medical bills can turn into debt and that overdue debt can pretty much be bought up by anyone.

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Banks holding consumer debt will write off the debt, then sell it for pennies to a collection agency. (John Oliver has a great episode on the shady debt-buying industry, btw.) You’re also at risk of being sued for owing debt and getting your wages garnished.

NEXT: Look closely at that “bill.”

5. Double-check that it’s not an Explanation of Benefits

Whenever you get a piece of mail from your health insurer, make sure you’re reading it thoroughly to understand what it is. Insurers may sometimes send an Explanation of Benefits to “explain what’s been paid on your behalf,” reads an article by Latoya Irby in The Balance.

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“The (Explanation of Benefits) can actually give you a heads up to medical bills that are on their way,” Irby continues. That way, you can budget accordingly so you don’t have a mountain of unpaid medical bills.

NEXT: Double-check everything — you know your insurance isn’t going to do it …

6. Verify the service isn’t covered by insurance

OK, so the real bill comes and it’s an ASTRONOMICAL price — what do you do? First things first, call your doctor’s office and double-check that they billed your insurance for the right service. Then, call your insurance and verify that the service you were provided is or isn’t covered.

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Medical billing is very complex so it’s likely that the people doing the coding are going to make a mistake. “Being proactive in clearing up mistakes can save you thousands of dollars,” writes Irby in The Balance.

NEXT: “Surprise billing”? Do this first before taking out the checkbook.

7. Talk to your insurer first before paying a ‘surprise billing’

Surprise billing happens when “families receive out-of-network care due to no fault of their own,” says a statement on health care advocacy organization Families USA’s website. Patients may visit an in-network hospital but providers they interact with might not be. It’s nearly impossible for a patient to determine this, especially if you’re distracted by a dreamy doctor like George Clooney’s character in ER …

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Especially if you’re SICK — don’t make sick people do anything, puh-lease! In a past Finance 101 article, Cheryl Fish-Parcham, director of access and initiatives at Families USA, says what can be done depends on your state and the particulars of said state’s legislature.

NEXT: Here’s why you might not be liable for surprise billing.

8. You might not be liable for surprise billing

“It would certainly be advisable for any consumer who has a surprise bill to talk to their state insurance department and find out what’s the remedy in their state,” Fish-Parcham tells Finance 101. In addition, there may be protections already in place to protect you from this type of billing.

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“Some states have bills relating to surprise billing currently in session,” writes Lara McCaffrey in the Finance 101 article. “For example, New Mexico passed SB 337, aka the Surprise Billing Protections Act, in April 2019 to take effect January 1, 2020.”

NEXT: Because of medical billing’s complexities, this often happens.

9. Eighty percent of medical bills have an error

“Most patient billing errors happen due to technology or a staff member entering an incorrect diagnostic code onto the bill,” writes Kayla Matthews in Medium’s Healthcare in America. “This becomes more common on bills that total more than $10,000 or more.” Mistakes can happen due to technology or human error.

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Medical billing is extremely complicated — there are tons of diagnostic codes that all look the same. A small typo can create a much more expensive medical bill for a patient. Matthews argues that not only do mistakes hurt patients, they hurt providers, too.

NEXT: This is important for anyone wondering how to get rid of medical debt.

10. Leave a paper trail when speaking to an insurer

It’s important to “have the receipts,” jah feel? However, Fish-Parcham tells McCaffrey in the past Finance 101 article that it’s important to call and speak with an insurance representative. It’s much easier to solve issues with a phone call instead of dealing with back-and-forth emails.

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“(Patients) should then follow up by either keeping notes of who they talked to and what they said,” Fish-Parcham tells Finance 101. “Then sending an email or a letter saying, ‘This is what I understood from our conversation.’” If the insurer contradicts a previous statement, pull up dem receipts!

NEXT: When in doubt, ask!

11. Ask if you qualify for financial assistance

Sometimes hospitals call it “charity care.” (Here’s the one time you’d want to be considered a “charity case,” my friend.) “If your income qualifies you for this help, sometimes the hospital might cut your bill in half or even forgive it completely,” reads a February 2019 NPR article.

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If you’ve visited a nonprofit hospital, they’re required by law to have assistance policies like this. So, either comb through their website until you find them or call the hospital’s billing department to inquire about these financial assistance policies.

NEXT: Word of the day: chargemaster price.

12. Ask for the non-chargemaster price

The bill that you get from a hospital might be full price — aka the chargemaster price — which is much higher than what insurance companies pay. Attorney Jen Bosco gives NPR’s Life Kit podcast an example of what that might look like: “They’ll say … our chargemaster rate is $10,000 for an MRI.”

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“But they might work out something with the insurance company to just charge $5,000 for the MRI,” Bosco tells NPR. “An uninsured person might be actually billed for the full chargemaster price.” Isn’t that SO unfair? Find out legit prices via Healthcare Bluebook.

NEXT: Where you put debt matters.

13. Don’t use a credit card for medical debt

“Paying by credit card only shifts the debt away from the hospital, where it may have a low interest rate or even none at all, into a high-cost form of debt,” reads the article from NPR’s Life Kit podcast. So, no need to panic and pull out the credit card immediately.

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“Work smarter, not faster,” is the message to those wondering how to get rid of medical debt. Medical debt has some protections in that it usually doesn’t have interest. The debt you incur on one medical visit will be the same months later.

NEXT: Which bills should you prioritize?

14. Other bills take priority over medical debt

Like many Americans, you may have multiple kinds of debt — student loan debt, credit card, and/or medical debt. With all that debt piled up, you might want to nip it all in the bud ASAP. NPR’s Life Kit podcast recommends putting medical debt as a lower-priority bill to pay.

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You need to have enough money for present needs like food and shelter. What might be a more urgent debt is your credit card debt. The interest on that is always going to be high as opposed to medical debt, which might not have any interest.

NEXT: Brush up on your negotiation skills.

15. Consider negotiations

You might not get exactly what you want — that’s the way it goes for both sides in negotiations — but you could give your wallet a little bit of a break. Consider offering to pay most of the bill right away, writes Penelope Wang in a 2018 Consumer Reports article.

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“You can often get the provider to settle for 20 percent less or more if you’ll pay them right away,” Bonnie Sheeren, a medical billing advocate in Houston, told Consumer Reports.

NEXT: A debt holder was given two options — which did she pick?

16. Financial hardship? Ask for a reduced rate

Reddit user GrandmaSlappy posted about their negotiations with a hospital. It wasn’t exactly something that would work perfectly for their family, but hey — at least it showed they were willing to work with them. “My husband recently had a stay in the hospital,” writes GrandmaSlappy.

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“We have about $4K debt with them and another ($1K) with the various labs/techs/etc. I called to … ask for a reduction in the bill. I was given (two) options — 30% off to pay it all up-front or pay it all with monthly payments.”

NEXT: Research if your hospital gives charity care.

17. Some states require hospitals to dole out charity care

Check with your provider or a provider association within your state to see if you can access this assistance. In California, where your dear Carla resides, most hospitals are required to provide charity care (aka financial assistance) to low-income patients who meet certain criteria, says the California Hospital Association’s website.

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A lot of times, patients aren’t even made aware that charity care exists, Emilia Morris of Central California Legal Services tells The Atlantic. “The patient sometimes gets sued, gets a judgment entered against them, without ever having heard of charity care,” says Morris.

NEXT: Medicaid might help.

18. Medicaid can be used for already incurred expenses

But only within a certain time frame, writes Irby in The Balance. Medicaid is a government health insurance program for low-income individuals. Whether or not you qualify depends on the state you live in, so check with your Medicaid officer before signing up. If you qualify, it can help with those bills.

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“Medicaid can be used to pay for medical expenses you’ve already incurred, but only within a certain time frame, so apply as soon as possible after receiving a medical bill,” writes Irby in The Balance.

NEXT: You can tell debt collectors this if they’re bugging you.

19. Send debt collectors a ‘no-contact letter’

If it’s been a while and you haven’t been able to pay off your medical bills, there might be debt collectors calling. It’s very annoying to have people blowing up your phone, but there’s something you can do to make it stop. “Send them a no-contact letter,” attorney Bosco tells NPR’s Life Kit podcast.

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“Tell them over the phone that you do not want to be called the number that they’re calling you at.” If you’re unsure about what to put in a “no-contact letter,” the National Consumer Law Center’s book Surviving Debt has some great tips.

NEXT: If you get sued by a debt collector, remember this.

20. A statute of limitations determines how long you can be sued

“The states each have a statute of limitations for how long you can be sued by a debt collector for debt,” reads an article from NPR’s Life Kit podcast. “If you think you might not actually owe the money and that insurance made a mistake, you can request an internal review from the insurance company.”

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A statute of limitations is a law that sets the maximum time after an event in which legal proceedings may occur, reads an entry in Investopedia. This will vary from jurisdiction to jurisdiction, so it’s best to research what the law says in your state or city.

NEXT: When in doubt, bring in the big guns.

21. Doctors might be able to advocate for you

In your journey of figuring out how to clear medical debt, make sure you enlist the help of your trusty physician. “If a patient wishes to get a certain treatment covered, Fish-Parcham recommends filing an appeal with a provider involved in the process,” writes McCaffrey in a past Finance 101 article.

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Retired surgeon James Moss, M.D., tells he’s pressured his state insurance board into covering some patients’ treatments. You can also reach out to your state insurance board, but a doctor will probably be more persuasive. (Especially if they’re as dreamy as George Clooney was in ER.)

NEXT: Here’s what a patient advocate is.

22. Hire a patient advocate to help

Patient advocates provide “guidance on everything from identifying a good doctor to reviewing potential treatment plans and staying on top of billing issues,” writes Mia Taylor in The Simple Dollar. Some hospitals have patient advocates or you can hire ones from private companies. Reddit user space_grotto found success using a patient advocate.

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“I had a surgery scheduled to remove growths from my abdomen … It was cancelled and I had to get a patient advocate to appeal the decision,” they write. “It worked and I got the surgery that has changed my life for the better.”

NEXT: If you don’t know where to begin, this organization can help.

23. Arrange a payment plan

If you feel that you can pay the entirety of your bill but just need a little bit more time, you might be able to arrange a payment plan with your hospital. Give them a call and see what you can work out! “Make sure you review your budget to figure out what you can afford,” writes Irby in The Balance.

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“As with any other bill, make your payments on time each month,” Irby continues. “Otherwise, your account may be sent to a collection agency despite your previous payments.” Take into account the bills you’re responsible for as well.

NEXT: It’s OK to file for bankruptcy.

24. File for bankruptcy if necessary

It’s not a desirable solution but one that can be taken in the absence of other solutions. “Medical debt can be completely discharged if you qualify for Chapter 7 bankruptcy or you can pay it over three to five years through a Chapter 13 repayment plan,” writes Irby in The Balance.

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Irby says that while no one wants to file for bankruptcy, it’s a much better course of action than struggling to make payments on medical debt. Depending on how much is owed, you might not be able to finish paying it off anyway.

NEXT: It’s the law.

25. You’re guaranteed certain protections under law …

“Established March 23, 2010, the Affordable Care Act (aka ACA, aka Obamacare) requires insurance companies to have certain protections and coverage in effect,” writes McCaffrey in a past Finance 101 article. “Some protections that health insurance plans must provide are coverage despite pre-existing conditions, free preventative care, mental health and substance abuse services, and more.”

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Take a look at for a comprehensive list of protections that should be applicable to people with ACA-approved health care plans. If an insurance company doesn’t comply with the law, report them to a state insurance board, stat!

NEXT: They call it “junk insurance” for a reason.

26. Unless you have a short-term insurance plan

“Health insurance isn’t about covering routine (doctor) visits. It’s about preventing an accident from bankrupting you,” writes Reddit user tea_and_honey. That’s why a lot of individuals choose to get a short-term insurance plan — plans with low monthly payments. But there are a lot of downsides, like limited protections.

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“If you’re buying a policy that complies with the Affordable Care Act you can be guaranteed of certain benefits,” Fish-Parcham told Finance 101 in a past interview. “If you buy a policy with the short-term, limited-duration plans, you’re not guaranteed those benefits.”

NEXT: Take a deep breath …

27. Dealing with medical bills requires a dose of patience

“It may take a long time — months or even years — to reach a deal you can afford. It’s worth it to keep going,” reads the article from NPR’s Life Kit podcast. The attorney interviewed — Jen Bosco — recommends channeling your “inner pushy lawyer.” (I know you have it in you!)

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It may be daunting to deal with a huge insurance company as one person. But you don’t have to do it alone — beyond this article, there are dozens of other online resources plus doctors and patient advocates to help you out.

NEXT: Know this inside and out before any doctor’s visits.

28. Plan before your visit by knowing your plan

Problems with medical bills can start if a consumer doesn’t know their medical insurance plan. Granted, it’s very difficult to understand the mumbo jumbo and intricacies of insurance language. Also, plans change year-to-year. But knowing your plan the best you can is a great asset to battling insurers over billing issues.

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Also, make sure your provider has the right insurance information in your file, recommends Consumer Reports. It’s easy to forget to update your doctor if you’ve received a new insurance card or changed jobs.

NEXT: This makes all the difference when it comes to how much your medical bill might be.

29. Before your visit, make sure you’re in-network

Usually insurance companies will have a feature on their website that allows consumers to search for providers. However, those listings might be out of date, writes Wang in the Consumer Reports article. To make sure your insurance is covered at the provider you want to visit, call your provider and inquire if they take your insurance.

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An out-of-network provider will increase your medical bill. Pro tip: If you’re admitted to a hospital and prompted to sign a financial responsibility document, write that you only agree if you’re given in-network care, Elisabeth Rosenthal, M.D., tells Consumer Reports.

NEXT: Here’s what you should know about “pre-authorization.”

30. Remember … Pre-authorization doesn’t mean coverage

Wang from Consumer Reports tells the story of Marc and Anne Montgomery, who got mixed up with the complexities of that “pre-authorization” term. The couple was told that their insurance plan had pre-authorized coverage for a surgery. Post-surgery, they got a bill for $30,000. They were shocked.

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They fought the claim but got nowhere. “Then in January, Anne contacted a medical billing advocate, who advised her to ask the hospital for financial aid based on their low income,” writes Wang in Consumer Reports. Anne told the hospital the bills would cause financial hardship, which helped the couple negotiate their bill down.

Sources for slides 1 through 14:

    • “6 Ways to Fix Mistakes on Your Medical Bills.” Consumer Reports. Accessed January 10, 2020.
    • “Americans Are Going Bankrupt From Getting Sick.” The Atlantic. Accessed January 10, 2020.
    • “Medical Billing Errors Are Seriously Hurting Healthcare.” Healthcare in America. Accessed January 10, 2020.
    • “How to Deal With Medical Debt Collection.” The Balance. Accessed January 10, 2020.
    • “John Oliver Buys And Forgives $15 Million In Medical Debt: But Is The Forgiveness Taxable?” Forbes. Accessed January 10, 2020.
    • “Medical Bankruptcy: Still Common Despite the Affordable Care Act.” American Journal of Public Health. Accessed January 10, 2020.
    • “For Working-Age Cancer Survivors, Medical Debt And Bankruptcy Create Financial Hardships.” Health Affairs. Accessed January 10, 2020.
    • “Rx For Medical Debt.” Life Kit podcast on NPR. Accessed January 10, 2020.
    • “Tyler Perry Helps American Couple Held ‘Hostage’ in Mexican Hospital by Paying $14K Medical Bill.” PEOPLE. Accessed January 10, 2020.
    • “What health insurers might not want you to know.” Finance 101. Accessed January 10, 2020.