Financial wellness9 min read

How to Cover Large Medical Bills

By Noah - September 29, 2020

Roughly 28 million people in the United States do not have health insurance. A hospital stay can cost nearly $4,000 per day, and life-saving surgeries or cancer treatments can come with six-figure price tags. Even people with insurance can find themselves on the hook for bills for many thousands of dollars.

Regardless how much money you have saved, an unexpected medical expense can leave you in trouble. If you get behind on other bills while dealing with a medical expense for you or a loved one, you can end up in a cycle of debt that’s hard to escape. So how can you get help with medical bills to avoid going deep into the red?

Get the Bill as Low as Possible

There isn’t a single, overarching structure in place to guide healthcare and hospital billing. That means hospitals may have to work on their own to balance their need to stay financially afloat with the need to comply with complex government regulations and billing requirements, and serve people in their community.

Medical providers may be willing to work with you to figure out a payment plan. Your first step is doing what you can to lower your bill.

Before going to the hospital

In an emergency, you may not have time to research options and discuss a detailed plan for your care. But if you have time to plan out your medical care, keep these ideas in mind:

  • Choose in-network providers: Talk with your doctor about everyone who will be on your healthcare team so you don’t overlook a care provider (e.g., the anesthesiologist for someone who is giving birth).
  • Ask for an estimate: Before you schedule an appointment or procedure, you can request an estimated cost for the services. You can also confirm they accept your insurance.
  • Compare providers: Different hospitals or clinics may price services differently. Comparing options may help you find the most affordable care. Of course, quality of care comes first — consider success rates for your procedure and your own comfort level with the provider, as well as any financial considerations.
  • Ask about your care plan: Many doctors let their office deal with charges and focus on treatment first (understandably). They may not realize you’re struggling to afford a certain test. You can ask if there are other tests or treatments available that achieve similar results at a lower cost.

After leaving the hospital

Once you have a bill in hand, it may feel like it’s too late to do anything about it. Not true: In many cases, you may be able to  reduce the amount you owe even after you’ve received your care and been billed. Here’s what to do:

  • Request an itemized bill: Hospitals are required to provide you with an itemized bill upon request. Often, requesting is enough to knock some money off the total. Why? An administrator preparing the bill may notice and correct errors along the way or cut miscellaneous charges.
  • Review the bill for errors: As many as 80% of hospital bills contain errors, according to some reports. You can contest any charge you feel is inaccurate for the care you received.
  • Work with a patient advocate: A patient advocate can offer medical bill assistance to decipher jargon and help catch possible errors you might overlook.
  • Ask about discounts and payment plan options: The billing office can talk with you about any solutions to make smaller payments over time, or even discount charges if possible. 

These tips may help decrease your bill, but they likely won’t remove it altogether. The next step, once you have your reduced medical bill balance, is figuring out where to find additional help with hospital bills.

Finding Financial Assistance for Medical Bills

When unexpected bills hit, many people search for loans to pay off the debt. The problem is that this strategy still leaves you in a tough position if you are unable to pay back the loan soon. What’s more, some loans use your home as collateral, meaning too many missed payments could lead to foreclosure.

What happens if my medical bill goes to collections?

Ignoring a medical bill won’t make it go away. A medical provider can send the debt to collections. Legally, debt collectors are not allowed to harass you, lie, or conduct unfair practices. In reality, debt collectors are notorious for breaking rules and using underhanded tactics to get payments. 

The three major credit bureaus wait 180 days before including medical debt on your credit report. Some credit score calculation models will ignore paid collection accounts, as well. If you’re able to pay debt or agree to a payment plan to keep your medical debt out of collections, you may be able to avoid hurting your credit score. However, if a medical debt goes on too long unpaid, it can impact your credit and remain on your report for 7 years.

Get help paying medical bills

Instead of rushing to replace medical debt with another loan, take time to understand your options and reach out for financial assistance.

  • Medicaid and CHIP help pay medical costs for children in families who can’t afford health insurance.
  • Social Security Administration (SSA) offices and Medicare may be able to help people over 65, people with disabilities, and people with end-stage kidney disease.
  • Cancer patients and others with chronic illnesses may have trouble making ends meet financially. A support organization related to your condition (e.g., the American Cancer Society) may offer resources for patients and families to find financial assistance for medical bills and other critical expenses.
  • State government programs: California, New Jersey, New York, Rhode Island, and Washington state offer paid leave benefits for caregivers. 

For general guidance on debt, you can speak with a nonprofit credit counselor to see if there are ways to consolidate or lower your total debts to a more manageable balance.

Are loans a good way to pay off medical debt?

If you decide a loan is your best option to pay off medical debt, remember that not all funding is equal. Choosing a reputable financier and repayment terms that you’re confident you can meet is essential.

Repayment terms can feel like the hardest challenge to overcome. Medical expenses are typically interest free, so paying them off with an interest-bearing loan (like a credit card) can feel like a step backward. If making monthly payments to the hospital strains your finances, it can also feel like making monthly payments to another lender will be no better.

For some families, a Home Value Investment with Noah could be a viable solution to get help with medical bills. The Noah investment gives homeowners a lump sum of money immediately. There are no monthly payments or interest. Instead, the eventual repayment is based on how your home value has changed over time. For homeowners who already planned to move in the coming years (e.g., to downsize), this can be an easy way to use home equity toward a current need, instead of waiting for years to access that value.

A medical emergency can affect anyone, and no one should have to face the prospect of ruinous debt to access needed medical care. If you’re struggling to find help paying medical bills, talk to an experienced financial professional about where to access financial aid resources to pay your debt and protect your credit.

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