If you can't pay your medical bills, you may be eligible to receive financial assistance from the government, a nonprofit, or the hospital itself. Check into all three possibilities.
Medicaid. You may qualify for Medicaid, which is a joint federal and state program for low-income individuals and families. Medicaid is set up by the federal government and is administered differently in each state. Although your income must be quite low to qualify, some people with higher incomes can get coverage if their medical bills are comparatively high. Medicaid is best used to reduce future medical bills, but that might enable you to pay your current ones. (To learn more about Medicaid, see Nolo's article Medicare and Medicaid: What's the Difference?)
State children's health insurance plan. Each state has an insurance plan to help cover health care costs for children in lower-income families. Contact your local or state-level social service agency to see if your children qualify.
Local assistance programs. Some states and local governments have assistance programs for people struggling with high medical bills. Some private nonprofit groups also offer financial assistance to help offset medical expenses. Contact your city or county representative (or local social service agency) for information.
Financial aid from hospitals or medical clinics. Most hospitals -- especially nonprofit facilities -- have charity care programs to help cover or reduce medical bills for some families. Eligibility is usually based on income and savings. Advertising for these programs is often minimal or non-existent, so you will need to actively seek them out. Many nonprofit medical clinics have similar programs.
Pursue Payment by Your Insurance Company
If you have health insurance, but your medical provider is billing you anyway -- or your insurer is refusing to cover all or part of a medical bill -- take action.
Contact the doctor or hospital. Make sure they have billed your insurance company.
Contact your insurer. Find out why the bill hasnât been paid and try to work out a solution informally.
File a grievance. If you can't resolve the problem, file a grievance with the insurance company immediately. Check your health plan booklet or look at the insurer's website to determine the proper procedures for filing a written grievance.
Consider Filing Bankruptcy
If you're thinking about filing for bankruptcy because of unmanageable medical bills, you're not alone. As mentioned above, 62% of all bankruptcy filings in 2007 were tied to health care expenses, according to a American Journal of Medicine study. So is bankruptcy the answer? For the most part, medical debts can be wiped out in a Chapter 7 bankruptcy, but it will lower your credit rating for several years. And if you donât qualify for the "clean slate" that Chapter 7 bankruptcy can provide, you may need to file under Chapter 13 bankruptcy. In that case, you'll likely need to make payments towards a portion of all your debts (including medical bills) under a Chapter 13 "reorganization" plan.
If you are considering bankruptcy, educate yourself about the pros and cons of filing and the differences between Chapter 7 and Chapter 13 bankruptcy. (To learn more about the different types of bankruptcy and the eligibility rules, see Nolo's Bankruptcy topic.) A nonprofit consumer credit counselor can also discuss the bankruptcy option in light of your particular situation. (For more on credit counselors, see the "Get Help" section below.)
Sometimes it's worthwhile to have someone on your side when you are deciphering medical bills, negotiating with medical providers, navigating the insurance system, or figuring out what you can contribute to a payment plan each month. Here are some places to turn for help.
Nonprofit Credit Counselors
Nonprofit credit counseling agencies can help you sort through your bills, establish a budget, and set up payment plans with medical providers. (To learn more about credit counseling agencies -- including tips on finding a reputable one -- see Nolo's article Choosing a Credit Counseling Agency.)
Medical Billing Advocates
Recent trends in health care -- including the high cost of services, bills filled with complex codes and jargon, and the elaborate web of insurance companies, health networks, PPOs, and the like -- have given rise to a new cottage industry called "medical billing advocates." These are private companies or individuals for hire that work with medical providers on your behalf to get your bills reduced. They help you find errors or overcharges in your medical bills, appeal coverage denials with your insurer, or negotiate lower fees with your medical provider.
Although medical advocates can be expensive -- often charging 30% of costs they recover or an hourly fee of $100 plus -- in some cases it's money well spent. The first consultation should be free and, then, the fee arrangement should be detailed in a formal written contract. To find medical billing advocates in your area (or by specialty), contact the Medical Billing Advocates of America at www.billadvocates.com.
Many hospitals have special advocates or ombudspersons who help resolve billing disputes between patients and hospitals.
If your medical bills are related to a particular medical condition or disease, contact local support groups. Members of these groups (for example, cancer or diabetes support groups) often have lots of information on where to get financial assistance and how to navigate the complex health care system.
To learn more about dealing with debt, creating a budget, negotiating with creditors, responding to collection agencies, and debt relief options like bankruptcy, get Solve Your Money Troubles: Debt, Credit & Bankruptcy, by Robin Leonard and Margaret Reiter (Nolo).
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