I started 2018 with medical debt resulting from emergency surgery I had last October. But, it could have been worse, and for a while it was. But with some determination and patience, I reduced my medical costs and avoided going into debt.
In the U.S., fifty-two percent of all of the debt-collection claims found on credit reports in 2013 were from medical debt. That’s because forty-three million healthcare consumers with a credit report have one or more medical accounts in collection. To put that in perspective, the debt you hear the most about, student loan debt, is owned by about forty-four million people (almost the same number of people) but fewer go to collection. They make up less than 1% of all of the debt collection claims.
Surprisingly, while student loan debt that ends up in collection averages about $3000 per person, medical debt in collection averages just under $600. As a result, the effect medical debt has on Americans’ credit scores is vastly disproportionate. But with some leg work, you can shrink medical debt or avoid it in the first place. Here are some ways how.
WHAT DOES YOUR INSURANCE PLAN COVER?
It is worth it to know what your insurance will cover and what it won’t and at what percentage. Your insurance company will have this information available online. You’ll have to log in, then look for your Medical Benefits Overview and it will break your coverage down by things like Outpatient Surgery, Office Visits, Preventive Care and more, as well as specifics about how much they cover in-network, out-of-network, in emergencies and so on. You can also learn this the slower and more frustrating way by calling the Customer Service number on your card. Either way, these are the basics. Know this stuff.
WHAT DOES YOUR BILL OR EXPLANATION OF BENEFITS SAY?
Look carefully at documentation you get from any of the providers you have seen. If you have surgery or are admitted to the hospital, you may get bills from all kinds of places and people from that date of service that you may not remember. If it isn’t clear you can ask your insurer for an itemized bill.
KEEP YOUR INSURANCE INFORMATION UP TO DATE
If you changed insurance companies, policies or just got a new insurance card in the mail, make sure any healthcare providers have the most updated information. If they don’t and they submit a claim, you could find out the hard way that there has been a change to your policy that your healthcare provider could have otherwise taken into consideration.
YOUR CLAIM HAS BEEN DENIED
In 2011 a Government Accountability Office investigation found that many of the health insurance claim denials (where the insurer refuses to pay for a service or treatment) was the result of very correctable things like duplicate claims, missing information on the claims, or services being provided before coverage started. Denials where the insurer challenged the appropriateness of a service or treatment were rare. So if you are denied, challenge the denial (an appeal), because that same investigation found that about half of denials end up being reversed when challenged.
It may be helpful to find out specifically why a claim is denied. You may learn that something as straightforward as the doctor used the wrong diagnosis code. You could then go to your doctor and ask them to correct that and resubmit the claim.
What? I can do that? Yes. Hospitals will often negotiate the amount of a bill. For instance, if you pay it all at once and early you can often get a significant discount. If you are uninsured, ask for the rate that insured people get (these are pre-negotiated by insurance companies and are much lower than the hospital’s unadjusted rates). There are payment plans too, and most hospitals have financial assistance programs if you just cannot pay. The only downside to trying to negotiate is the time it might take, but it could be well worth it.
ASK ANY AND ALL PROVIDERS IF THEY TAKE YOUR INSURANCE
The biggest surprise I ever got on a medical bill was for an anesthesiologist. I had major surgery and everyone involved accepted my insurance except for the anesthesiologist. I got a big bill in the mail and there wasn’t much I could do because that specialist was out of my network. Always ask. It’s your right to know.
Know your plan coverage and what providers accept it. Keep your information up to date and don’t be afraid to appeal a claim denial or negotiate with a hospital. Those few things can make a huge difference. For me it meant the difference between an initial bill for over $30,000 to having to pay only $800. It’s worth it.