SAN JOSE, Calif., March 23, 2021 /PRNewswire/ -- One day last
winter, my younger brother, who had recently moved to Colorado, called to let me know that he was
going to be skiing for the first time with some friends. He was so
excited, and I was excited for him.
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Unfortunately, the excitement was short-lived. Soon after
arriving at the slopes, a nasty wipeout left him with a broken
collarbone and in need of a long ambulance ride to the nearest
hospital.
About a month later, I received another (rather panicked) call.
My brother had just received a $1,500
ambulance bill. He assumed that his hospital bills would likely
cost just as much, if not more, and his insurance deductible was
$6,000. How was he going to
afford this?
My brother had painfully discovered that medical bills could be
crushing, even with insurance. Thankfully, I was able to share some
strategies to help him cope with these unexpected costs. If you're
dealing with expensive medical bills that you can't afford, here
some things to consider, from myFICO.
1. Negotiate with the Hospital's Billing Department
If you're hoping to negotiate a lower amount for a medical bill,
don't bother contacting the doctor who performed the services.
Instead, you'll want to find and call the phone number of the
billing department.
Before you start the negotiation process, it's important that
you do a little homework. Begin by reviewing your bills to make
sure that there aren't any errors. For example, you may have been
billed for a service that you never actually received. You can
search for billing errors yourself or work with a company that
specializes in identifying them, such as Medliminal or
CoPatient.
Next, you'll want to know the typical cost of all the tests and
care that you received. Healthcare Bluebook can be a great resource
during this step. If you can confirm that your doctor's office or
hospital's prices are well above the average for your area, this
could help your case during negotiations.
Now that you've done your research, it's time to call up the
billing department. There are two tips that will improve your
chances of having a productive conversation. First, be calm and
polite. Yelling or throwing insults at the billing representative
will only hurt your chances of getting any available help.
Second, ask open-ended questions. For example, rather than
asking, "Can you take $500
off my bill?" try something akin to "Can you
share with me all the relief programs, waivers, or discounts that
are available?" By keeping the question open, you
may discover financial help that you would have never even thought
to ask for.
2. Set Up a Low-or-No-Interest Payment Plan
Even after negotiating a lower amount for your medical bills,
they may still be too high to pay off in one lump sum. What can you
do? Again, the hospital or clinic billing department may be able to
help.
Ask the billing team if they offer payment plans. By setting up
a payment plan, you can split up the bill into smaller chunks while
also avoiding late charges or collections agencies. Plus, the
interest rates on hospital payment plans are often very
generous.
My wife and I once set up a payment plan for an expensive
emergency room bill that allowed us to make interest-free payments
for 12 months. And if we had needed more time to pay off the bill,
the interest rate for the next six months would have been very
low.
If you can't set up a payment plan with your hospital, there are
third-party companies that offer them as well. Some even include 0%
options and promise to accept all applicants regardless of credit
history.
3. Look for Healthcare-Related Grants
There are a number of non-profit organizations that offer grants
to help make medical care affordable to everyone. A few examples
include:
- HealthWell Foundation
- PAN Foundation
- United Healthcare Children's Foundation
- CancerCare
Many foundations that offer grants for medical bills focus their
financial assistance on those who are underinsured or are dealing
with specific diseases. Visit the websites for each foundation to
find their grant eligibility criteria and to apply.
4. Apply for a 0% APR Credit Card
Many credit cards offer 0% APR promotional periods to new
cardholders. Some of the best cards available today offer 15 months
or more of zero interest.
By signing up for one of these credit cards and paying your
medical bills with it, you can essentially create your own 15+
month 0% payment plan. This strategy worked great for my brother
after he had exhausted his bill negotiation options.
It's important to note that you'll typically need a good FICO®
Score to get approved for a 0% APR card. Also, note that once the
promotional period ends, your interest rate will switch to the
card's standard rate. According to the Federal Reserve, the average
credit card interest rate is currently 14.65%.
5. Consider Medical Credit Cards or Credit Lines
Like traditional credit cards, medical credit cards may offer
low or 0% interest rates. What makes them different is that these
cards can only be used to pay for medical expenses. This makes
medical cards less flexible than traditional cards.
Know that a 0% APR credit card is not the same as a
deferred interest card. With deferred interest financing
(which some medical credit cards offer), all of the interest that
would have accrued is added back to your balance after the
promotional period ends.
This doesn't necessarily mean that you should avoid deferred
interest offers. But it does mean that you should make every effort
to pay down your balance before the end of the introductory
period.
Final Thoughts
There are many ways to get financial help for your health care
expenses. But if you've already fallen behind on your medical
bills, you may be worried about how it could affect your FICO®
Score.
The good news is that medical debt will only impact your credit
if a collections agency becomes involved. And, even so, a 180-day
waiting period must pass before the credit bureaus will add the
debt to your credit report.
Finally, know that the credit reporting agencies must remove any
negative items related to medical debt from your report if it is
later paid by your insurance company. Check your credit reports
with myFICO to make sure that these special medical debt rules are
being followed.
About myFICO
myFICO makes it easy to understand your credit with
FICO® Scores, credit reports and alerts from all 3
bureaus. myFICO is the consumer division of FICO– get your FICO
Scores from the people that make the FICO Scores. For more
information, visit https://www.myfico.com.
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