Paying hospital bills after insurance has paid its portion is a challenge for many Americans. The majority of Americans simply don’t have the money available to pay their outstanding bill.
The crux of the problem is this: According to HealthCare.gov, the average cost of a 3-day hospital stay is approximately $30,000. And, according to the Federal Reserve, 39% of Americans don’t have enough money readily available to pay for a $400 emergency. They state that the median savings amount in America is $3,500, which is clearly not enough to cover the cost of a 3-day hospital stay.
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Why are hospital bills so expensive?
Between the rising costs of healthcare due to new developments in medical technology and the shortcomings of health insurance, many people are left with hospital bills that are simply unpayable.
According to The Hastings Center, health care economists estimate that 40% to 50% of annual health care costs can be attributed to new technologies or the intensified use of existing ones. They believe controlling this technology is the most important factor in reducing costs increases, which would result in more manageable bills for patients.
The high deductible health plan (HDHP) is one type of health insurance plan that can leave patients with large balances after their insurance company pays their portion of the hospital bill. This type of plan features a deductible of at least $1,400 for an individual, with a maximum out-of-pocket of $6,900.
While the minimum deductible for an HDHP is $1,400, many people carry deductibles of $5,000 or more to make their health insurance premiums manageable. The higher the deductible is, the lower the monthly premium will be. Based on the average amount people have in their savings accounts, it’s readily apparent that they can’t pay their deductibles, which leaves a large portion of their hospital bills unpaid.
How to pay hospital bills without insurance
If you find yourself in the position of not being able to pay your hospital bill, there are steps you can take to help deal with the situation. Like paying any outstanding debt, it won’t be easy, but you will ultimately pay your balance.
Here are five things you can do to help you deal with this challenge.
1. Check your bill carefully
It’s no secret. Hospitals make mistakes when it comes to billing people for supplies, medications, procedures — even the number of days people were actually in the hospital.
Take your bill and go through it line-by-line. Make sure you received the actual items and services you’re being billed for. It’s not unusual to see everyday items, such as aspirin or tissues, on a bill when you never received them. And you’ll notice that the cost of these items is substantially higher than the retail prices you pay at your local drug store.
There are companies that will analyze your bill and look for discrepancies. Even though they’ll take up to half of what they save you, they can sometimes reduce hospital bills by hundreds or thousands of dollars. It may be worth it for you to check this option out.
2. Don’t ignore contact for payment
One of the worst things you can do is not respond to the hospital’s billing or finance department when they want to talk to you about your unpaid balance. If you do this, it won’t be long before an outside collections agency is contacting you. They’re often much more aggressive with their collection techniques, and your credit score may take a hit as well.
Hospitals are known for setting up reasonable payment plans for those who can’t pay their outstanding bills, often with little or no interest charges. Talking with the hospital and being upfront about your challenges paying their bill will prove to be more beneficial for you than ignoring them.
3. Ask for a discount or price reduction
Believe it or not, negotiating hospital bills is possible. Some hospitals will give you a discount if you ask. They do this in consideration of prompt payment, either through you making a lump-sum payment or setting up a payment plan.
Keep them honest and make sure you weren’t overcharged compared to other local hospitals. The Healthcare Blue Book can be a valuable resource to help you from overpaying for anything from daily room rates to surgical dressings. Ask for a discount if you find their charges to be higher than comparable hospitals in your area. Being a smart healthcare consumer can equate to big savings.
4. Avoid using your credit card if possible
When you get the hospital bill and feel a lump in your throat as you compare it to your savings account balance, don’t panic and pull out the plastic. It’s a short-term solution that often creates a larger, long-term problem.
The interest rate your credit card company charges you is very likely higher than a hospital’s interest rate. The compounding of that higher rate can take a $5,000 balance and turn it into payments made of $7,500 or $10,000, depending upon how long you carry a balance. Avoid the temptation to finance through your credit card. Instead, take the time to find out what the hospital’s payment terms are and negotiate better terms if you can.
5. Investigate your state’s billing protection laws
Surprise medical bills often occur when you receive care from an in-network hospital but that care is provided by an out-of-network doctor. Some states have “balance billing” protection laws that mandate that you’ll only be responsible for paying the in-network rate for the doctor in cases like this. These savings can potentially free up thousands of dollars that you can use to pay your hospital bill. Check with your state and see if this regulation exists if you’re faced with this situation.
The bottom line
Being unable to pay any outstanding bill can be stressful, but perhaps none as much as when it’s a large hospital bill. Every day, hospitals across the country work with countless individuals who cannot pay the full amount due. The good news is that the steps outlined above can help you get your balance marked “Paid in Full.”
Trying to avoid the need for these best practices in the first place? There are a number of affordable types of supplemental insurance options worth considering, such as critical illness, hospital indemnity, accident, and disability insurance.
Sure, buying more insurance probably isn't ideal. But it may very well be the most cost-effective way to avoid the struggles of expensive hospital bills down the road.
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