Managing High Medical Bills

Take steps to reduce, eliminate, or better manage your high medical bills.

Medical debt is a major cause of financial struggle for many people. It can prompt patients and their families to file for bankruptcy, rack up thousands of dollars in credit card debt, use up retirement savings, or even lose their homes. Although high medical bills can be overwhelming -- and the complex health care system daunting -- there are steps you can take to reduce your medical debt and its impact on your financial well-being. This article outlines your options for dealing with mounting medical bills.

How Big Is the Problem?

Nearly 79 million Americans struggled to pay medical bills in 2007, according to a study conducted by the Commonwealth Fund. This large number is due, in part, to the rising cost of health care. In a February 2009 report, the Healthcare and Utilization Project estimated that hospitalization charges for an uninsured person average $19,400 per stay. This trend -- along with increasing numbers of uninsured or underinsured people -- has spelled financial disaster for many.

The recent economic downturn has exacerbated the problem. Because most people get health insurance through employment, many people who have lost their jobs have also lost their health insurance. And even for those who do have insurance, job losses and reduced incomes make it harder to pay medical bills. In January 2008, 18% of people reported having trouble paying medical bills. By December 2008, that number had risen to 21%.

In 2007, of those with high medical debt, 21 million charged the debt to credit cards, 8.1 million took out a second mortgage or loan, and 28 million used up all of their savings. And according to a study conducted by the American Journal of Medicine, 62% of all bankruptcies in 2007 were at least partially linked to medical expenses, even though the majority of bankruptcy filers had health insurance.

So what can you do to manage your medical debt?

Review Your Medical Bills Carefully

If you're having trouble paying your medical bills, the first thing you can do is look closely at the charges. The federal General Accounting Office estimates that 99% of all hospital bills contain overcharges. Other experts claim that hospital overcharges average $1,300 per hospital stay. Not surprisingly, experts recommend that you examine each medical bill carefully.

Request and Review Itemized Invoices

If you don't get an itemized invoice from the doctor or hospital, request one. Then, as you read each line on the bill:

  • Check for duplicate charges.
  • Call the billing office and ask for an explanation of any codes or medical jargon that you don't understand.
  • Look for unreasonably high charges -- research the standard industry rates for certain items or procedures (some overcharges will be obvious, like $10 for a box of tissues or $80 for a pregnancy test).
  • Take notes on items you don't understand.
  • Write down any questions you have.

Check for State Limits on Hospital Charges

A handful of states have passed laws placing limits on what hospitals can charge for health care services. For example, California's Hospital Fair Pricing Act puts a cap on treatment charges for self-pay patients. Similar laws exist in Illinois, Minnesota, and New York.

Meet With the Billing Office

If you find errors on your medical bill or have questions about certain charges, make an appointment with the doctor or hospital billing office to discuss the situation. Don't hesitate to challenge overcharges, double billing, and anything else that seems unfair.

Negotiate Your Medical Bill

Medical providers are often willing to negotiate your bill if you're having trouble paying in full. Ideally, you should contact your medical provider before the bill is delinquent or before the collectors start calling. If you want to negotiate your bill, here are some options to propose:


Ask for a discount on your medical bill. Many providers spend a great deal of time and effort tracking down folks who don't want to pay. So, when they encounter someone who is at least willing to pay something, they may be happy to make accommodations. (If you have a chunk of cash, use Nolo's eForm Offer to Settle Debt With a Reduced Lump Sum Payment, to negotiate a discount on your bill.)

Payment plan

Ask if you can pay the bill over time. Some medical providers will accept as little as $50 per month. Some charge interest, some don't. Get all payment terms in writing. If your circumstances change, contact the provider and try to negotiate a different arrangement. (Use Nolo's eForm Offer to Pay Debt in Installments.)

Down payment in exchange for reduced charges

If you are able to, offer to pay a substantial down payment (perhaps 10-25% of the bill) in exchange for a discount on the overall bill.

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