Are you drowning in thousands of dollars of medical bills that you just can’t seem to shake? Do new bills come in faster than you can pay off existing ones? If so, you need a plan. Escaping medical debt is entirely possible.
The Lowdown on Medical Debt
According to a Kaiser Family Foundation (KFF) analysis of government data, nearly 1 in 10 adults – approximately 23 million people – owe the medical debt in the United States. This includes 11 million people who owe $2,000 or more and 3 million people who owe more than $10,000.
The KFF study found that people between the ages of 35 to 64 are most likely to have medical debt, while larger percentages of people in poor health (21 percent) and those living with a disability (15 percent) report having medical debt.
One of the biggest problems with medical debt in the U.S. is that underlying financial situations make it difficult to proactively address bills.
“Many households do not have enough money available to cover the cost of a typical deductible in a private health plan,” KFF notes. “For example, about a third (32%) of single-person households with private insurance in 2019 could not pay a $2,000 bill, and a half (51%) could not pay a $6,000 bill.”
Getting out of medical debt doesn’t usually happen by chance. It requires a strategic and proactive approach. This begins with understanding what the options are.
How to Escape High Medical Debt
If you’re facing thousands of dollars in medical debt, it’s important that you come up with your own plan. Here are some of the first steps we recommend taking:
1. Negotiate With Medical Providers
Never assume that what you see on a medical bill is what you’re supposed to pay. You have to carefully scrutinize every single line item on each statement. Otherwise, you have no idea what you’re paying for.
If your healthcare provider only sends you one large bill with the total amount, call the medical billing number listed on the statement and ask for an itemized bill with CPT codes. They have this information available – it’s just a matter of sending you a different version of the bill. Once you have this in hand, you can see what you’re being charged for. In some cases, you’ll find erroneous charges. Or you may be able to research reasonable costs for specific CPT codes and see if they’re overcharging you.
Once you’ve had time to analyze your bill, negotiate with medical providers. You’d be surprised how much they’re often willing to slash off your bill if you explain that you’re facing financial problems and are only able to pay a certain amount. In some cases, bills get reduced by 25 to 50 percent.
2. Apply for Charity Care
There are dozens of medical charity groups whose sole purpose is to help people facing medical debt and/or bills in collections. Have you looked into any?
“Hospitals sometimes overlook or fail to screen patients eligible for their financial assistance programs,” NPR explains. “Nonprofit hospitals are required by law to offer charity care and other community benefits. This is where self-advocacy can make the biggest difference.”
Do some online research and/or contact your healthcare provider to ask for a list of these organizations and their contact information.
3. File for Bankruptcy
If you’re in over your head and you believe it’s impossible to dig your way out, you may want to study up on your bankruptcy options.
“Most people are too scared to file for bankruptcy because they assume they’ll lose their house or car,” attorney Rowdy G. Williams points out. “But did you know that most people are able to keep all of their property while simultaneously wiping out their medical bills and other debt?”
At the very least, talk with an attorney about what your medical bankruptcy options are. This will give you an idea of what’s realistic and what’s not.
4. Optimize Your Budget
Don’t underestimate the importance of getting your personal finances in order. A simple budget that accounts for all of your income and expenses can help you allocate more money for staying current with medical bills. This will help you avoid accruing larger balances and buy you more time as you evaluate other options.
If you have the time, look for a second job or side hustle to increase your income. Adding a few hundred dollars of additional cash per month could mean the difference between drowning in debt and reducing your balance over time.
Adding it All Up
You can’t wave a magic wand and wish your debt away. You can, however, implement a documented plan that chips away at your debt and paves the way for future financial freedom. The important thing is that you start as soon as possible. Otherwise, your debt balance will continue to grow exponentially. The time for waiting has passed. Let’s get proactive!
