Getting a large medical bill, or multiple bills can easily result in some serious debt. Healthcare services aren’t cheap, and if you don’t pay them off in time, you risk losing your assets, having poor credit, and possibly having to file for bankruptcy. In fact, medical debt is currently the leading cause of bankruptcy in the country today. When you get a medical bill, you typically have 180 days to pay it before it gets sent to collections. If you don’t pay the bill within that grace period your credit score will take a hit. A single bill sent to collections can drop your credit score by 50-100 points, and the unpaid medical bills stay on your credit score for 7 years!
Now say you use your savings to pay off your medical debt, you may not have the money to cover your other expenses, like bills or your mortgage. So now it’s a vicious cycle where one unpaid bill can turn into you falling into even more debt, losing your home, or worse. Not to mention, medical debt can then also affect your health. People with medical debt are less likely to seek medical care because they’re expecting even more debt from getting healthcare. As a result, not seeking healthcare causes your health to decline. Unfortunately, medical bills get expensive quickly, but there are steps you can take to prevent it entirely. Below we’ll look at what you can do to make sure you avoid medical debt and the downward spiral it can cause in your life.
Avoiding Medical Debt
The best thing you can do is avoid medical debt in the first place. We know sometimes that feels easier said than done, but it’s true. There’s plenty of ways you can avoid getting exorbitant bills and not have to worry about climbing out of medical debt.
Compare plans
Comparing your health insurance plan to make sure you’re getting the best coverage is the best place to start. Not all health insurance is made equal. There are plans that are better for people with less medical need and plans for people who need more medical attention. Choosing the right plan type is the key to avoiding medical debt. Afterall, you don’t want to be paying for services you don’t need or be paying for a health plan that doesn’t have nearly enough coverage. Every plan has different costs as well, so comparing prices is essential. Two companies can offer the same exact plan, but the prices can vary between a hundred dollars.
Understanding your health insurance plan
Now that you’ve selected a health plan that you feel is best for you, get to know it. Read over your welcome packet, take note of what services are covered, which ones aren’t, and which ones are free. Every health plan will have some basic health services that are covered even before you meet your deductible. Knowing what benefits you have can keep you from suddenly getting a medical bill for a service you assumed was covered. Some plans will only cover certain types of testing, or certain doctors. Make sure you know which is which.
Look at savings account options
If you choose a high deductible health plan (HDHP) you can actually also link a health savings account (HSA) to it. You can contribute money into your HSA tax-free. When you use the funds for qualifying medical expenses you can also withdraw the money tax free. This account can help you make sure you have money put away specifically for medical needs such as copays, coinsurance, prescriptions etc. Not to mention, the money in the account will never be taxed, even if it builds interest or if you invest it. That makes these accounts triple tax advantaged which is a benefit you can’t really beat.
How To Handle Medical Debt
Now, we know that you can’t always avoid medical debt, and tips to avoid medical debt aren’t helpful if you’ve already got some. So let’s look at what to do if you already have some medical bills piled up. Don’t worry, there’s steps you can take before trying to find a second job or declaring bankruptcy. You have a few options here.
Make Sure the Charges Are Correct.
Errors happen, even in billing departments. Billing departments deal with a lot of data and it’s shockingly common for medical bills to have errors. In fact, 8 out of 10 hospital bills have errors. Your invoice should be itemized, with each service and its cost listed separately. If it’s not itemized you can request one from the billing department. Check your bill for possible mistakes, like charges for services or medications you never got. For instance, if you have a bill for a hospital stay, make sure you weren’t charged for a full day’s room rate if you were discharged in the morning. There can also be typos or other errors. Look at each one and verify that each item is accurate. You can call the medical department if you have any questions or corrections.
Don’t Ignore The Bill.
Never, ever ignore those medical bills. It’s one of the worst things you can do, it guarantees that it will only get worse. The bill will go to collections and you’ll start receiving all those annoying collections phone calls and letters. This is where your credit score will take a hit, and the longer that debt sits there the worse it gets. We know it’s tempting to just “whoops” those bills into the trash but you’ll pay severely for it.
Don’t Pay It Off with A Credit Card.
It might seem like a good idea to use your credit card to pay off a medical bill. However, this is another big no-no. You’ll just be giving yourself more debt and might actually end up paying even more for the medical bill than originally had. Credit cards have high-interest payments, so carrying a balance on your credit card can lead to a never-ending cycle of debt. In turn, this can also lower your credit score. Unlike other debts, medical debts typically carry low to no interest. So, putting them on your credit card actually adds to the debt you have to pay.
Negotiate A Payment Plan.
Unlike other types of debt, there’s more wiggle room to negotiate payment plans for medical bills. Generally, as long as you’re paying something towards it they’re satisfied. You can even negotiate interest-free payment plans. Call the billing department and see if they’re willing to work with you, they’d rather get payments from you than go into collections. Even if they first suggest a payment plan that’s too expensive you can negotiate and talk them down to a more affordable number. This way they get paid and you avoid having this debt follow you for the next 7 years.
Dealing With Debt Collections
You know those unknown numbers that start calling and leaving voicemails and sending you letters about your bills being in collections? The last thing you want to do is deal with them, but you may have to. If the worst case scenario happens and your bills are turned over to a collection agency working with them is your best bet. It’s a lot easier to deal with internal collections, which are the ones that work at the hospital or doctor’s office. The internal collections departments are much more willing to negotiate payment plans, but we know more often than not, it ends up going to a third party collections agency. Here are a few suggestions to help make dealing with those agencies a little less painful.
Know What Debt Collectors Can Do.
Debt collectors actually aren’t allowed to call you an unreasonable amount of times, and they aren’t allowed to call at unreasonable hours like before 8am or after 9pm. Here are some of the debt collection rules.
Debt collectors are not allowed to report your medical debt to credit bureaus if they’ve only had the account less than a year.
If your medical debt is under $500 they can’t report them.
If you’ve asked them not to call you at your job they are legally not allowed.
They can’t threaten to sue you without a significant reason
Debt collectors are not allowed to tell you that you’re committing a crime by not paying them
They can’t threaten to tell others about your debt (except for your lawyer or spouse)
Debt collectors cannot ignore your debt validation request either. If you send them a letter saying you want to verify that the debt is legitimate, they can’t contact you before responding to that letter.
Document Everything
Conversations with debt collectors can quickly get heated, but debt collectors are legally not allowed to harass or threaten you or use intimidating language. So, be sure to record all phone conversations with debt collectors. Once you reach a payment agreement, make sure you ask for it in writing. Don’t make any payments before you get the physical document stating exactly how much you have to pay. Then keep proof of payment. If your debt is ever questioned, you will be able to show that you paid the agreed amount.
Negotiate With Debt Collectors.
Obviously, debt collectors want full payment, but be firm and offer to pay what you can afford. They will likely agree. They will most likely have a counteroffer. Ultimately that’s their job- to get as much of this debt paid as possible. It looks better on your credit report if you can pay off the debt in full. But chances are you can’t. So, offer to pay what you can afford and don’t accept an offer that you won’t be able to meet.
Working With EZ
As we said in the beginning, avoiding medical debt is your best bet. And the best way to do that is to get the best health insurance plan for you. At EZ we can help you compare every plan available to you and find you the one that fits your needs and stays within your budget. We can actually save you hundreds of dollars a year by just choosing the right plan. To get started, enter your zip code into the bar below for your free instant quotes. Or give one of our licensed agents a call at 877-670-3557.
One in five Americans have received a surprise medical bill from an emergency department, and another one in five have gotten unexpected bills from non-emergency hospital stays. Surprise medical bills have been a huge problem for Americans, but on January 1, 2022, the No Surprises Act took effect. This law establishes federal protections against most surprise medical bills that come after you receive out-of-network care during a hospital visit. Find out what the No Surprises Act means for you.
Surprise bills can be scary and overwhelming, but now you can worry no more!
In some cases, when you receive medical treatment (especially in an emergency situation), you will be unable to choose the provider who treats you, and so you end up unexpectedly receiving care from an out-of-network provider. Or, you might visit an in-network facility, but unknowingly see an out-of-network provider during your stay there.
Your insurance company will often pay some amount to the out-of-network provider, but typically less than the provider’s list price for the services. In most cases, the provider who treated you will then “balance bill” you for the difference between their list price and the insurer’s payment. In other cases, your insurer will offer little to no coverage of your unexpected out-of-network care. And in both of these scenarios, you’ll end up getting an unexpected bill, known as a “surprise” medical bill.
Getting a surprise medical bill in the mail can be a source of a lot of anxiety for many people. Two out of three Americans say they worry about being able to afford unexpected medical bills, and nearly half can’t afford to pay surprise bills in full.
Ending Surprise Bills
But the No Surprises Act will now make surprise medical bills a thing of the past. The law bans:
Surprise bills for most emergency services, even if you get them out-of-network and without approval beforehand.
Out-of-network cost-sharing (like coinsurance or copayments) for most emergency and some non-emergency services, so you can’t be charged more than in-network cost-sharing for these services.
Out-of-network charges and balance bills for certain additional services (like anesthesiology or radiology) administered by out-of-network providers as part of a patient’s visit to an in-network facility.
In addition, according to the law, you can’t be asked to waive your protections against balance billing in emergencies or for certain non-emergency services, such as ancillary services (anesthesia, pathology, radiology) associated with emergency care, or diagnostic services such as radiology or labs. It will be up to medical providers and insurers to identify which bills are subject to the Act.
“This law puts an end to the practice of charging patients exorbitant bills for unexpected, out-of-network care,” Sen. Patty Murray, chair of the Senate Health, Education, Labor, and Pensions Committee, said.
What the No Surprises Act Does Not Cover
Unfortunately, the bill does not ban all surprise and out-of-network bills. It will exclude:
Ambulance rides– The law applies to air ambulances, but not ground ones.
Certain facilities– The law applies to hospitals and emergency departments, but not to other facilities, such as urgent care facilities.
If you are unsure if a bill you received in the mail falls under the No Surprises Act, or if you have general questions about the new law, contact the newly established No Surprises Help Desk at 800-985-3059.
Find A Better Health Plan
Unfortunately, sometimes you will find that your health insurance plan doesn’t cover everything you need it to, leaving you with a big bill that you will have to pay out-of-pocket. If your plan isn’t adequate for your needs, it’s time to find a plan that is, so you can save as much money as possible. If you’re shopping for a plan, your best bet is to speak to a licensed EZ agent. Our agents work with the top-rated insurance companies in the nation, so we can compare plans in minutes. We will not only find a plan that has all the benefits you’re looking for, but we will also make sure the plan fits your budget. To get free instant quotes, simply enter your zip code in the bar above, or to speak to a local agent, call 888-350-1890. No obligation.
Everyone knows they need health insurance, but it’s one of those things that people will often put off getting, for a variety of reasons. Some people think they don’t need it because they’re healthy, or that they won’t be able to afford it, since the cost of insurance has been on the rise. Not only that, but the pandemic caught everyone off guard and caused hardships for many people, including the loss of jobs and health insurance plans. In fact, we’ve got some very eye-opening stats on the state of health insurance in our country today that you need to see – some of them might just convince you that now is the time to finally find your plan!
Millions Of People Lost Coverage Because of Covid
Millions of Americans lost their jobs in the early days of the pandemic when so many businesses were forced to shut down for months. And when these people lost their jobs, they also lost the health insurance provided by their employer, and many remained without health insurance because it was too expensive to purchase their own individual plans.
Over 70% of Uninsured People Say The Cost is Too High, but There’s Something They Don’t Know
One of the main reasons people decide not to purchase health insurance, or to even look into purchasing a plan, is that they think the price is going to be too high. But what some people might not know is that President Biden has made health insurance cheaper and more affordable for people with low to no income by opening up subsidies to more Americans. The Biden administration estimates that ACA premiums will decrease by about $50 per month, with one administration official emphasizing that 4 out of 5 people enrolling “will be able to purchase a plan for $10 or less per month.” This could make a huge difference in the lives of the 14.9 million people who are currently not insured in the U.S.
Over 40% of Those Who Are Insured Don’t Have Enough Coverage
For those who do have health insurance, almost half of them are underinsured, and unfortunately don’t find this out until they receive big bills after getting treatment. Some people don’t review their plan or assume the plan they’ve had for years will be sufficient, when in reality it might not be adequate for their needs. If you think this might be the case for you, or you think that you can only afford the coverage you have and nothing more, it’s worth looking into other plans and speaking with an agent.
Many Americans have overdue medical bills that lead to bankruptcy.
Studies show that around 20% of Americans have bad credit reports because of outstanding medical bills. Because wages are low, inflation is rising, and medical services are extremely expensive, people are choosing to put their money towards other necessities, instead of paying their medical bills.
Medical Bills Are the Leading Cause of Bankruptcy
Over 60% of bankruptcies in America are caused by high medical bills! But what many people are unaware of is that you can have your medical debt forgiven: hospitals do have medical debt forgiveness programs, so if you are struggling with bills, speak to them about ways to have your bill reduced, or even waived completely.
Get Affordable Coverage
Health insurance can be expensive, but with professional, highly-trained agents on your side, you can find an affordable plan with the right coverage for your needs. We know it can feel like there are endless things to think about when looking for a health insurance plan for you and your family. Do you want more flexibility? Supplemental insurance? Cheaper prescriptions? But the easiest way to find the right plan for you and get the answers to these questions is to work with an EZ agent. We will compare plans, go over every option, discuss your needs, and help you sign up for the plan you need, all at no cost to you. Our services are completely free, with no hassle and no obligation.Get free health insurance quotes by entering your zip code in the bar above, or to speak with a local agent, call 888-350-1890.
If you have had a medical emergency, are dealing with a major health issue, or if you have a family member that needs medical attention, your medical bills are most likely piling up. And, unfortunately, accrued medical bills often lead to medical debt, which is something that many Americans are all too familiar with. In fact, 59% of people who have been contacted by a debt collector say that it was because of medical debt, and more than 27 million Americans lack any health insurance to help them cover their medical expenses.
It’s clear that paying off medical debt is not always possible, but what you might be unaware of is that your medical debt can be forgiven! Depending on your household income level, and if you meet certain requirements, you can get a large chunk of, if not all of, your medical debt forgiven.
Check your bill because experts estimate that 30 to 40% of medical bills contain errors.
If you receive a large bill from a doctor or hospital, the first thing you should do is check if it’s actually correct – shockingly, experts estimate that 30 to 40% of medical bills contain errors. These mistakes can be due to coding errors, being incorrectly billed for procedures or services you didn’t receive, or getting double billed. You always have the right to contact your insurance company to question any medical bill, and you should always contact your provider’s billing department to ask for clarification on any bill that is unexpected or seems unusual to you.
Next, Check Medical Debt Forgiveness Programs
If the bill is legit, but you cannot afford it, be aware that your hospital bill could be waived completely, or significantly reduced, depending on the state you live in and your income level, so be sure to look into medical debt forgiveness programs.
How does medical debt forgiveness work? Well, the Affordable Care Act has certain requirements for nonprofit hospitals with 501(c)(3) IRS tax status concerning their financial assistance policies for low-income patients; even if the hospital in question is not a nonprofit, state laws specify standards for how much financial assistance a hospital has to provide a patient of a given income level. For example, in Maine, all hospitals have to provide free care for patients whose household income is up to 150% of the federal poverty level. Medical debt forgiveness is generally provided on a sliding scale, which means that if your income does not qualify for full forgiveness, you can still qualify for partial forgiveness.
To find out more, call the hospital where you incurred your debt and ask about qualifying for the hospital’s financial assistance policy, or what some hospitals call “charity care.” When applying for medical debt forgiveness, generally hospitals will ask for your tax return, pay stubs, and whatever else is necessary to prove your income and household size.
If you pay a smaller lump sum, you can get your bill reduced by as much as 20 to 40%.
If you don’t qualify for a debt-reduction program, or if your bill was not incurred at a hospital, there are other options for reducing your medical debt, including asking the doctor or hospital if you can pay a smaller amount in one lump sum, or set up a payment plan. If you choose to offer a smaller lump sum, you can get your bill reduced by as much as 20 to 40%. But if that is not possible, you can work out a payment plan with the hospital or doctor, which could be as little as $20 a month if that’s all you can afford – just be sure to ask if you can pay off the bill without any interest added.
Medical debt is sometimes unavoidable, and it can take a big toll on you. If you’ve received a bill that you’re struggling to pay, remember to first check if an error has been made. If that is not the case, you still have options: you could even get your medical debt forgiven depending on the state you live in and your income level. The best way to find out if you can dissolve your medical debt is to find out your specific state laws – and the best way to avoid medical debt in the first place is to make sure that you have a good health insurance plan that will meet your medical and financial needs. There are plenty of affordable plans out there! To get free instant quotes, simply enter your zip code in the bar above, or to speak to a local licensed agent, call 888-350-1890.
