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Medical Bills, Even if You Have Insurance, Can Cause Frustration and Debt

This article was written by in Health. 9 comments.


When I write about advocating for the consumer when he or she is in debt, I usually receive a good amount of feedback blaming the consumer for his or her situation. Yes, in many cases, households fall into debt because they buy more things they cannot afford, whether knowingly or unknowingly. In many cases, they ignore their own financial condition without worry for their future or while knowing that a declaration of bankruptcy can save them when life gets rough.

Not everyone falls into these categories, I remind the critics. Medical emergencies are expensive and cannot always be adequately planned for in advance. Credit card debt maybe the only option, or sometimes just a slightly better option that financing your bills directly from the hospital. Here is one example from the New York Times:

Mr. Kupka has multiple sclerosis. The Kupkas, who live in Lindstrom, Minn., have an annual income of $45,000 — a combination of her salary as an office manager and his disability payments. More than 20 percent of that income goes toward health care. Their annual insurance premiums total $5,400, and then there’s the $4,000 Mr. Kupka spends on drugs, doctor’s visits and lab fees before he fulfills his policy’s deductible.

In the three years since Mr. Kupka’s disability forced him to stop working as a mental health therapist, he has accumulated $12,000 in debt. “It’s frustrating,” he says. “We earn too much to qualify for state and county assistance, but not enough to stay ahead of the bills. I’ve thought maybe my wife and I should get divorced. But not only is it against our faith, it turns out it wouldn’t help…” [A]s Mr. Kupka’s situation illustrates, it’s not just uninsured patients who rack up large bills. Nearly two-thirds of those with debt problems… had health insurance.

The article offers tips for dealing with insurmountable medical expenses:

  • Confront, don’t ignore, your situation. If you don’t pay your bills and the hospital decides to use a collection agency, your hardship will increase. Your credit report and credit score will be adversely affected.
  • Review your bills. Health providers make mistakes on bills all the time, but many errors are not caught. Some procedures or services may have several names, identical is everything except price, so it helps to work with a medical expert if you have any questions. You can also resubmit your bills to your insurance company if coverage is denied. If you are still not satisfied, your bills may qualify for a third-party review.
  • Hire an expert. The article suggests working with the Medical Billing Advocates of America to find a qualified mediator to negotiate between yourself and the health care provider.
  • Don’t use a credit card. If you can help it, avoid paying your bill on a credit card if you can’t pay off the balance quickly. Interest charged for your use of someone else’s money will increase your debt. Watch out for credit cards offered by a hospital with immediate approval. These are like store credit cards; they might offer a 0% interest rate up front, but you might fall into a trap and owe much more interest than they’ll tell you when they’re busy saying, “You’re approved!”
  • Don’t let debt collectors take advantage of you. Know your rights for dealing with debt collectors in your state. They may only call you during certain hours, they may not harass you, and they may not threaten you. If they break the rules, you can file a complaint with the Federal Trade Commission.

Situations deteriorate faster if you do not have health insurance. Find a way to get covered if you are not a member of plan yet.

Published or updated April 30, 2009. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 9 comments… read them below or add one }

avatar Doctor S

Medical visits and their bills can absolutely cripple a person and their family members. My dad is currently going through a legal battle with a elderly care center that never filed the paperwork to our state medicaid for an extended stay for my grandmother. They claim they explained to her that she needs to file the paperwork. One problem: She speaks zero english!

Doctors offices and healthcare related center have often capitilized on the naiveness of its clients and it is pretty absurd. I am receiving bills for the first time for work I received last year under a different health plan! I am going to have to contact the experts you speak of above b/c I am getting sick of this stuff. We need healthcare reform. Great post b/c this is just a huge can of worms!

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avatar sam

I think this is a tough time for anyone the last thing you want to think about when you are poorly and you just want to get better. I think the UK is better prepared to deal with these situations with more people covered by NHS and also then covered personally.

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avatar HOBtrvlr

I’ve often found that medical providers are willing to work with you on your bills. My company’s health plan is a high-deductible health plan with an HSA. Our annual deductible is about $2300. Last year in January, my wife had a procedure which cost about $1600. Since it was only January, we hadn’t had any other medical expenses, meaning we were still $2300 away from hitting the deductible–and that we’d owe the entire $1600. I called the hospital’s billing department (a large NYC hospital), and they happily set up a payment plan where we made $160 payments for each of the next 10 months. 0% interest! We were able to build up our HSA (through our contributions and my company’s contributions), and eventually paid off the debt.

Glad I called the billing department, because I didn’t know they’d be so willing to work with me. You never know if you don’t ask…

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avatar One Frugal Girl

A lot of large hospitals have a patient relations coordinator that may be able to put you in contact with higher ups in the billing department. Look through your bill very carefully and if you don’t understand something ask.

I was once charged for 60 minutes worth of time in a hospital pain clinic, despite the fact that my procedure lasted less than 10 minutes. In my case I waited for 50 minutes for a CT scan while the hospital attempted to get their billing procedures and costs in order. Sure enough they tried to charge me for that waiting time. Since the wait was no fault of my own I contacted the pain clinic and asked them to review the bill. After review the bill was reduced by 52 minutes or roughly $1300!

The trick is to be persistent. This absolutely sucks, because when you don’t feel well the last thing you want to do is deal with hospital officials and employees in the billing department. If you don’t have the strength, find a family member or friend who can help and don’t give up. I spent eight months trying to resolve the billing issue mentioned above, but in the end it saved me a lot of money.

Also, you’ll be angry and irritated, but try your best to be nice to the hospital employees you come into contact with. Thank them for their time, patience, attitude, whatever, but make sure to thank them. At times you’ll want to yell and scream at them, but try to be nice, believe me you’ll definitely get better service and a quicker response time.

Lastly, if all else fails write to the highest up person in the hospital that you can find. Keep asking to speak with managers and their managers. Hopefully you will eventually get a hold of someone who can help you.

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avatar James Fowlkes

This is certainly something to be aware of. Good thing you brought it up. A friend of mine had similar issued when after he was diagnosed with brain cancer. You think your insurance covers you then boom, all of a sudden you find out it does not. Worth looking into that big thick booklet they give you every year that nobody reads!

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avatar kitty

One other thing I’d like to suggest is looking into charitable organizations that help people with out of pocket costs for a particular condition. Often the income limits for these foundations are 4 times state poverty line vs 135% for medicaid. Depending on number of people in the household and the state, someone with 45K may qualify. Also, unlike medicaid this organizations don’t have asset limits only income limits.

For example, Healthwell foundation: http://www.healthwellfoundation.org/index.aspx helps people with a number of conditions. I don’t see multiple sclerosis on the list, but there might be some organizations that help.

Another thing a friend of mine told me when her husband was treated for cancer is that if you call and try to negotiate they often reduce the bill. She said getting the bill down by 5% is almost automatic and often you could get more.
In her case, she was faced with high 5 digits (or maybe even 6 digits — I don’t honestly remember the exact amount she mentioned only that it was very high) worth of bills after insurance refused to pay for chemo after they pre-approved it. They said – this type of chemo is not approve for exactly this type of cancer. She eventually managed to successfully appeal. She still had some 5 digits worth of co-insurance for chemo and tests, but she managed to pay it off quite successfully by a combination of negotiating, getting some providers agree to a payment plan and shuffling the balance between 0% credit card offers until she repaid it. In some cases – good credit, limited amount of expenses (rather than ongoing), 0% offers can indeed help.

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avatar Facet5

1. Know what your insurance DOESN’T cover.
2. For each procedure, ask what type medical personnel, facilities, and equipment are going to be involved–x-rays/MRI/CATScan and the readers(separate charges)
3. When you find this out, call all of them and ask if they are PROVIDERS under your insurance–get their PROVIDER NUMBERS from them or your insurance company
4. SHOP–prices are different
5. Don’t assume because that because a procedure is being in done in a room in your doctor’s office that the ROOM and the EQUIPMENT and the ANESTHESIOLOGIST and anyone else involved are PROVIDERS–they may NOT be.
6. Many ER doctors are NOT PROVIDERS of any insurance
7. The night before a procedure, CALL FOR PROVIDERS NUMBERS AGAIN
8. Ask for GENERIC brand products to be used

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avatar vn

It is hard to find any other word rather than “ridiculous” when you see a hospital bill. Even room itself might cost you a few thousand a day. There are some people somewhere getting this money. Who are those people?
The reason for high cost of healthcare is the lack of competition within the healthcare industry. This is the direct result of Government involvement and lobbying activities of the highly corrupt Medical and Pharmaceutical associations. Those groups with the help of Government are creating artificial shortage of Medical providers and monopolizing the drug distribution. To prove this fact just ask your doctor how long ago he(she) was involuntarily unemployed. Admission to Medical schools in U.S. is regulated by American Medical Association (AMA) with the help of American Government. There is no free market balance between supply and demand in medical profession.
For me, as consumer, it is better to have more doctors available, including those who are not necessary “the best in the world”, than not to have enough of them or just those you can’t afford anyway. Similarly, it is better to have more affordable drugs available, including those, which are not necessarily “FDA approved”, than to have only those which are “approved” and cost you at least twice as much as people pay in Mexico, not mentioning the untrustworthiness of this “approval” in many cases.
The price, what we are paying for medical services and pharmaceutical products for most of times is a monopolized price. The only way to destroy this monopoly (and rather obvious one) is to somehow strip the regulatory power from AMA and PhRMA (Pharmaceutical Research and Manufacturers of America) and also destroy possible corruption of FDA.
Politicians usually are reluctant even to admit the very existence of such corruption and, instead, when referring to healthcare issue they prefer talking about “treating the symptoms”, rather than “killing the disease” – something like forcing employers to provide insurances coverage, or opening some kind of “medical savings accounts” and so on – all of it are simply different attempts to find ways to pay the existing high cost rather than removing all the obstacles and letting a free market to drive this cost down. Although, it is understandable, that going on economical crusade against people of medical profession requires some guts and at least to be in a good health. Clearly politicians don’t have the first and they either don’t have or are afraid to loose the second.
Hopefully, not all doctors turned themselves into businessmen yet; there are still some people who are following good medical ethic of the past to provide help first and think about gratitudes later. Unfortunately, it is very tough for them to survive in totally corrupt environment of the big medical “not-for-profit” networks and organizations.
To resolve this high healthcare cost issue we need to make its “ridiculousness” known to the public and analyze what causes it by looking close to every medical bill in details, even if insurance pays for most of it. Insurance companies are not in a business of printing money (at least not until now with the help of our Government) – they collect all those money from us. The public tend to ignore the “ridiculousness” component of the medical cost based on emotional thought: “how can I blame them – they saved my life”. That is why itemization of medical bills is so important. When you see, that your “savior” charged you your weekly salary for ten minutes of his “highly skilled” work you would understand better all moral aspects of his salvation idea.
It would be nice, if this site could provide the separate web page for people to post there most ridiculous medical charges they’ve got.
We have to stay vigorous on this issue of corruption, or otherwise, Government would use high cost as an excuse to completely socialize American healthcare system, to make it even less accessible and very ineffective.

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avatar D.B. Cooper

I am in the same boat, I have health insurance yet a recent non-ER medical emergency has just about ruined my life. The hospital billing office was not willing to come down one single cent, just divide payments out over three months. “Luckily” since I have stellar credit I was able to apply for a new CC w/ no APR for a year, not a great option but better than throwing myself off a tall building :}

Oh and before you holier-than-thou right-wind jackals leap all over me saying it’s my fault, I deserve to die, etc etc. know that I seriously doubt I could possibly be any more responsible with the money I earn, I can virtually guarantee I am more responsible with what paltry sum I make than any of you with yours, plus I get physicals every year, exercise, eat well and have basically no bad habits of any kind.

I agree with the OP when he says the lesson learned is to NEVER go to the clinic or hospital again.

Anyone have advice on how to weasel out of this debt? :}

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