Medical debt is one of the most damaging expenses for people who are struggling to pay their bills. A 2009 Harvard study found that medical debt cause more than 62 percent of all bankruptcies – compared to only 8 percent in 1981. And while recent changes to health care legislation might help some consumers, most of the study participants who declared bankruptcy because of medical bills did have health insurance.

These statistics show how important it is for consumers to know how to manage their medical bills, both before they undergo a procedure and after the bill arrives. It is possible, however, to reduce medical costs — and to negotiate better prices with providers to avoid dangerous debt.

1. Be sure you are “in network.” Patients with health insurance should be sure the physicians they see are in the insurance carrier’s network. With many plans, in-network physicians, surgeons, hospitals and pharmacies result in lower expenses. In some cases, charges from doctors and facilities outside the medical network won’t be covered at all. Review your plan documents, speak with the doctor and call your health insurance provider if necessary.

2. Pay bills in cash. Cash (or check) payments will keep you from getting into more credit card debt, and they also give you more negotiating power.

3. Ask for a discount. Some doctors give patients a cash discount for paying out of pocket. Talk to the billing manager about your situation. Many providers and facilities will offer discounts of 10 to 50 percent for people who can pay cash up front. If you have lost your job, explain the situation and ask what they can do for you.

4. Save on medications. Ask your doctor if a generic medication will work as well as a brand-name one. Also investigate any possible discounts, from insurance to AARP to AAA. Mail-order pharmacies sometimes allow customers to order several months of medications for significant discounts. Also check prices at warehouse club and discount/chain store pharmacies.

5. Appeal to insurance to have services covered. If a procedure is not covered under your health insurance, follow the appeals process to ask that the insurer cover your care.

6. Read medical bills. Some experts estimate that 80 percent of medical bills contain errors or inflated charges. Ask for an itemized bill and read it carefully. Protest any erroneous charges to negotiate a lower fee. Review payments from insurance providers for accuracy, too, since providers often require patients to pay any difference between their usual charges and what the insurance company pays. If a large bill is very confusing, consider hiring a medical bill consultant who can review the bill with an expert eye.

7. Don’t give up. Be persistent. If you really cannot pay a bill, try calling the hospital or provider to speak to the billing office manager. Explain your situation. Then follow up with a letter, outlining why you cannot pay in full and/or cannot pay at this time. If you do not get a resolution that you can afford, continue calling or writing, and ask to speak to higher-level managerial staff who might be able to discount your fees. Be sure to keep records of whom you spoke to and when you spoke. You can use the lowest Medicare payment for a hospital procedure as a starting point.

8. Pay critical bills first. The most important payment to make is a mortgage. If you fall behind on mortgage (or rent) payments, you could lose your home. After the mortgage payment, prioritize other secured debt, such as an auto loan, and then credit card bills, medical expenses and other unsecured debt.

9. Find out if non-covered costs qualify for “safety net” help. If you are unemployed, do not have health insurance and truly cannot pay a bill, talk with your physician’s office or hospital about how to get help. They should be able to direct you to your state’s agency or other resources. Be prepared to provide substantial proof that you cannot pay.

10. Get help if you need it. If you are facing severe debt hardship because of medical bills, you might be able to qualify for help from debt negotiation experts or a debt settlement company. These companies can work with you to settle your debt for much less than the initial amount. Do be cautious, however, that you are working with a reputable company.

Health care is one of life’s necessities, and no one should be denied care because they cannot pay. Do your best to manage your health care so that you can avoid crippling medical debt, but if you do get into problems because of medical costs, know that you can seek the help you need to regain your physical and financial health.

Author Bio: Freedom Debt Relief provides consumer debt relief services. Working for the consumer to negotiate with creditors and lower principal balances due. Freedom Debt Relief has served more than 80,000 clients since 2002. The company is a member of The Association of Settlement Companies and the International Association of Professional Debt Arbitrators.

Category: Finances
Keywords: freedom debt relief, debt relief, debt settlement