How to Pay Off Medical Bills Without Going Broke

Patients who have received medical diagnostic or treatment procedures have often been surprised by the services' price tags. Whether expenses stem from preventive care, routine doctor visits or major medical events requiring intensive treatment, the resulting bills can easily become overwhelming. Although problems with medical debt often affect those without insurance coverage, many medical bill-burdened individuals and families have medical insurance. Fortunately, careful planning and discipline -- along with cooperation from your providers -- can lead to a manageable solution.


Objective Budget Analysis

Take a realistic look at your monthly income and expenses before embarking on a bill resolution plan. Ask an accountant or other financial professional to assist you if the prospect seems intimidating.

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First, deduct non-negotiable expenses such as your mortgage or rent, insurance, car payment and utilities. Next, take a hard look at expenses such as your cellphone and cable bills, along with your morning latte and restaurant costs. This might be a challenging exercise, but your "bottom line" discretionary income will be a good starting point for your billing negotiations.


Verify Billing Accuracy

Medical bills typically arrive days or weeks after your doctor visit or treatment date. Although you might be tempted to put the invoice aside, review it immediately. Examine each line item charge to make sure it's valid and hasn't been duplicated elsewhere on the bill.

If you have invoice-related questions, contact the provider's billing department. Discuss the issue calmly and courteously, referring to your bill and your medical insurance policy, if applicable. Don't agree to any type of payment plan or credit card billing until the charge is resolved to your satisfaction.


Establish a Payment Plan

Take the initiative to resolve your unpaid balance. By communicating with your provider and remaining forthright and cooperative, you'll increases your chances of a "win-win" solution.

Insured Patient Payment

If you have medical insurance but can't pay the balance after the insurer has paid its portion, ask the provider to waive your copay amount and that your bill be marked "paid in full." Attach a copy of your policy's Explanation of Benefits form to strengthen your case. Emphasize that the insurer's payment represents a large chunk of the balance.


If the provider stands firm, send a second letter. Request a monthly payment plan that fits with your already-established budget. Explain how you arrived at the amount of the payment you're proposing.

Send a written communication to the medical practice or lab before a bill becomes past due. Address your letter to the physician or other direct service provider if possible, rather than the billing department. Detail your financial situation. Be honest, but protect your family's privacy.


Uninsured Patient Payment

You can take a similar approach if you face challenging medical bills and don't have insurance. Contact your provider directly. Speaking directly with your doctor might be beneficial if you have a good relationship with him. First, explain your financial situation. Next, ask to pay the lower service fee that the practice accepts from insurers for patients with major medical coverage. Regardless of that outcome, request a realistic monthly payment plan for the unpaid balance. Understand that the provider might also charge you interest.


Take Out a Home Equity Loan

If you have sufficient home equity, you may be eligible for a home equity loan to pay your medical debt and potentially other expenses. In fact, bill consolidation is the most common reason homeowners take out these popular loans.

After you receive the loan, you'll make one monthly payment that's probably smaller than all your bills added together. Your interest rate should be attractive because the loan is secured by your house. Your cash flow should also improve, leaving you with extra discretionary income. Finally, your credit profile should gradually look more favorable as lenders see that you aren't as overloaded with debt.


Remember, your home equity loan is secured by your house. It's essential to keep making payments even if your medical issues are resolved.