In the midst of a serious health crisis, the last thing on your mind should be money. You have enough to worry about just getting to the hospital and getting help.
However, after the crisis passes, unless you have very good health insurance, you can find yourself facing a second crisis -- figuring out how to pay your hospital bill. Even a short hospital stay can cost thousands of dollars per day. Add an appendectomy or other operation, and you can easily run up a bill of $20,000 or more.
If you're overwhelmed by hospital bills and don't know you can ask the hospital for help, you can make a serious mistake. Some people pay the hospital bill with their credit card or medical bank card, creating a generally non-negotiable, high-interest debt.
Others drain their retirement accounts, file for bankruptcy or both. Still others do nothing at all. They don't have the money, and they don't know who to talk to, so they may even stop opening the bills. That can be the most expensive mistake of all.
"If you don't talk to (the hospital), if you're not even communicating your financial hardship, you will get sent to a collection agency," says Nicholas Newsad, author of "The Medical Bill Survival Guide." Your account will be closed at the hospital, and then the hospital will not talk to you. When you're dealing with the hospital, you have patient rights. But once that account is closed, it's just a legal process."
Ask for Financial Assistance
If you have catastrophic hospital bills, look for help immediately. Learn about your hospital's policies for financial assistance. Newsad says hospital policies are pretty standard across the country.
"Most hospitals in the U.S. -- at least 60% -- are not-for-profit," he says. "They're held to this charity-care standard by law. They have to provide charity care to people with limited means."
The hospital may be able to help make your bill more manageable in one or more of these ways.
- Discounts based on income level. "Income measures are always tied to a percentage of federal poverty level," Newsad says. At 200% of the federal poverty level, a consumer usually gets free care. If you're at less than 300% of federal poverty level, you usually get 50% off, he says.
"The more people you have in your family, the higher your federal poverty level. We call these sliding scale health discounts. The less income you have, the bigger your discounts," Newsad says.
- Catastrophic medical policies. The hospital sets a fixed limit -- usually a percentage of your income -- on how much they can bill you in a year, Newsad says. The hospital waives anything above the limit. "For example, some children's hospitals will say, 'Your medical bills will never be more than 25% of your income,'" he says.
- Uninsured discount. If you don't have health insurance, you may get a discount if you ask. Newsad says, "What you're looking at is the sticker price, which we never really intended to bill anybody. What we've created is an uninsured discount that gets you down to an insured rate."
- Payment plans. Few people can pay enormous hospital bills out of pocket at once. Hospitals expect to get paid over time. To stay in their good graces, be sure to set up a payment plan. Don't just start sending in less than the full amount.
- Hardship plans. Besides reducing bills, hospitals often let you suspend payments during a temporary emergency, such as a layoff or medical leave. Again, get permission. Don't just stop paying.
Communicate With the Hospital
Discuss these four remedies with your hospital and then decide what you can afford to pay. Chris Hogan, director of the wealth coach program for financial guru Dave Ramsey, says that as soon as you get off the phone with the hospital, sit down with your spouse and review your budget.
Don't overestimate your financial capabilities. "One of the worst things you can do is make a promise you can't keep," Hogan says. "It just sets up a foundation for a rocky relationship with a creditor."
Continue to communicate with the hospital. Meet with a patient representative to discuss your hospital bill. Bring all the paperwork they ask for, which may include copies of your last two pay stubs, identification and a bank account statement.
Don't just wait for the hospital to tell you what your payments will be. Bring your budget to show how much you can afford to pay. Hogan says you should write a descriptive letter to be submitted with your case to the hospital committee.
If you don't get a payment plan you can accommodate, don't lose your temper and don't give up. Keep trying. Hogan says, "I want people to understand the hospital may not like the number you say, but you have to hold your ground. You have to protect the boundaries of your family."