Paying Your Medical Bills Without Insurance
The United States of America is one of the only highly developed countries that doesn’t offer universal healthcare for its citizens. The price of healthcare services in the US is also astronomical. If you don’t have access to health insurance — an essential service — what does that mean for your finances?
Unfortunately, it could be quite some time before the United States is able to offer universal coverage for its citizens, and until then the healthcare sector will continue to profit off of overpriced services that are essential to maintain personal health.
Although congressional efforts have made some successful efforts to help minimize the gap in insurance coverage, not everyone has the ability, access, or money necessary to get coverage for themselves. Sometimes it can be as simple as a personal choice, but there are also individuals who fall between the gaps: such as those in one of the nineteen states that didn’t expand coverage for Medicaid to the lowest income bracket.
Outside of insurance coverage, navigating the medical billing world is also a difficult and confusing process. For almost every American, electing to get a medical procedure done means you’re going in blind to the cost. You have to wait until you’ve received the service before you can ever see the total price. Once that’s done, you’ll be ushered into the maze of actually paying your bill.
Many hospitals have turned to outsourcing their billing department, or have rapid transitions for bills that go into collections. Plus, if you have insurance, many insurance companies will still only cover a fraction of an essential service, leaving you with a massive bill months after the procedure was done.
If you have medical bills that you need to pay — or anticipate that you might down the road — how can you navigate this world and manage to avoid massive debt?
Table of Contents
How Medical Prices Are Set
Before diving into your options, it helps to understand the basics of how hospitals decide on the price of a service. You may be surprised to find that many hospitals offer different prices for identical service. Where do they determine these prices? Are politicians, insurance companies, or the cost of technology to blame?
As it turns out, prices are often set at the hospital level for each service, and although insurance has had some part to play historically, many hospitals choose their own price so as to make a profit. They also don’t like to name those prices prior to the service being done so that patients don’t have the ability to comparison shop. As one piece in the New York Times highlighted from 2013, the hospital’s “chargemaster” (the master document with all the prices for services) is at the root of this problem. NYT contributor, Tina Rosenberg, wrote:
“Chargemaster prices are set by the hospital alone and reflect what the hospital would like you to pay. They are the basis for calculating the discounts given to insurers, and they are generally what’s billed to people without insurance. These charges are commonly three times the Medicare price or more, but The Times reported that in the [Centers for Medicare and Medicaid Services] data, some hospitals charged 10 or 20 times the Medicare price. The variation makes your head spin. The average charge for a joint replacement at a hospital in Ada, Okla., was $5,300. The comparable charge in Monterey Park, Calif., was $223,000.”
The biggest upset about these chargemaster prices is that everyone could potentially be affected: even those with insurance. The prices are set by the hospital to offset the discount that insurance companies demand, but they are also the set price for everyone that doesn’t have insurance coverage. Additionally, you can still be charged these fees if you are out-of-network for your insurance: whether it’s the hospital, the doctor, or even the equipment used to treat you.
Although many states have tried to improve the transparency around healthcare service costs, not much has been done to change why they’re so expensive. And since it’s not possible to comparison shop when you’re on death’s door, you might always be stuck with a bill you can’t pay. So what options do you have to try to save money or avoid debt?
1. Find Affordable, Discount, or Sliding Scale Clinics
As long as you’re not facing an emergency situation, you might have the opportunity to search around for an affordable alternative for care. There are many clinics available that can offer low-income or sliding scale options. Additionally, shopping around now can potentially help you down the road in case an emergency situation happens. You’ll be able to know what hospitals to visit and which to avoid due to their prices.
The best way to find out the cost of a visit or service is simply to call ahead and ask. Additionally, there are some databases available — such as NeedyMeds’ database on Free / Low-cost / Sliding-Scale Medical Clinics — that you can use to discover affordable clinics in your area.
2. Review Your Bills and Dispute Inaccurate Claims
If you already have medical bills from past procedures, you can always review your bills and dispute any inaccurate claims. Many hospital billing departments will make mistakes; the estimated percentage of inaccuracies varies widely, but some groups estimate it could be anywhere from 7 percent to 80 percent of bills are inaccurate. Additionally, even doctors or nurses can enter incorrect information on your patient chart.
Since many hospital bills will be in the form of a medical code, finding inaccuracies can be difficult. Luckily, many of the codes used on the bill are universal and can be researched online. Once you understand the codes, you can look for any potential errors, such as:
- Duplicate claims
- Canceled work
- Charges for services not received
- Incorrect room charges
- Inflated fees for services, your hospital stay, or medication costs
It never hurts to review your bill, ask questions about specific aspects that might be confusing, and dispute anything that wasn’t accurate. Remember: don’t pay it until you understand it.
3. Negotiate a Payment Plan
Many hospital bills have a portion of fine print at the bottom of the invoice that discusses possible payment plans. Many of these plans are also interest free. If you find yourself facing a massive medical bill that you can’t pay off in one go, then it could be worth it to explore these payment options.
Every hospital will have a different option, but it’s important to know that figuring out a repayment plan with the hospital is not a guarantee that the bill won’t go to collections. There’s still a possibility that your bill could be turned over if you pay just a couple days late or you don’t pay the minimum amount requested. And hospitals don’t have to warn you when your payment goes to collections.
If you do manage to negotiate a repayment plan, make sure you’re aware of all the requirements before you sign up. If your bill does go to collections, you’ll just have to renegotiate another payment plan, and collection agencies don’t have ideal options.
4. Apply for Financial Assistance
In the end, some hospital bills are simply too large to overcome. If you fall into this camp, don’t be discouraged. Medical debt is some of the most common forms of household debt in the United States, so you’re certainly not alone. Also, you’re not out of options yet.
Outside of payment plans, hospitals might also offer financial assistance for astronomical bills. If this is the case, they may first require you to apply for Medicaid assistance. If you are rejected from Medicaid, they might ask to see your tax returns, paychecks, or other financial information to ensure you qualify. If approved, they could offer you a discount on your bill, or have some other options available. No matter what, asking for financial assistance will require a lot of paperwork, but could also be your best way to avoid massive debt and potentially going into collections.
Paying Bills Without Insurance
Medical bills will be a nightmare for some time, and — until Congress steps in to make policy changes — we will be expected to foot the bill. However, that doesn’t mean you should ever ignore your medical bills.
Although FICO 9 and VantageScore 4.0, the two most common credit score algorithms, no longer consider medical collections debt as detrimental to your score, medical collections can still have a detrimental impact on your life. Some banks still rely on old credit scoring models, which means those medical collection bills can haunt you for quite some time. Additionally, it can be stressful to have consistent calls from collection agencies, and avoiding those bills will only transform them into bigger hurdles to overcome down the road. What else makes up a credit score? Find out how to read the entries on your credit report at our credit score resource center.
Health insurance might be a luxury for many Americans, but life without medical insurance doesn’t have to be a death sentence — or a pathway to bankruptcy. There are options available that can help you navigate the tough terrain of medical billing, and there are ways to pay off your large medical bills over time. Research your local clinics, review your recent bills, ask about payment plans, and consider financial assistance if you need it.
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Katie McBeth is a researcher and writer out of Boise, ID, with experience in marketing for small businesses and management. Her favorite subject of study is millennials, and she has been featured on Fortune Magazine and the Quiet Revolution. She researches SEO strategies during the day, and freelances at night. You can follow her writing adventures on Instagram or Twitter: @ktmcbeth
This post was updated December 19, 2017. It was originally published November 6, 2017.