A fabulous story on Reddit about an incredible man with an even more incredible medical bill was the inspiration for this piece. This man’s wife had cancer. He lost his job, the insurance went with it, and he was left holding a staggering $12,000 medical bill. It’s a common story. What’s not common is how this man negotiated the debt all the way down to $1,500 Many people suffer from sticker shock when they have to go to the hospital. To this day, medical emergencies are the single biggest cause of bankruptcies in the United States, so if you’re in a bind and are facing a mountain of medical bills you’re struggling to pay, read on, and we’ll help point you in the direction of people who can help. Before we do that though, let’s take a peek behind the curtain and see what causes those astronomical bills in the first place.
Medical Pricing, Explained
In the early 1980’s, a group of IT professionals got together and designed a database called “Chargemaster.” The idea behind Chargemaster was simple. The goal was to create a national database of consistent procedure pricing, modified by the cost of living index in each region of the country. Sounds good, right? But right away, there were problems.
While hospitals were only too happy to have a pricing database installed, they were none too fond of the idea of having to adhere to any sort of standardized pricing. The first thing that most hospitals did when they got the database (and virtually all of them did), was set their own pricing, put in some arbitrarily high inflation adjuster, and let the prices sit. Nobody ever went back to check the prices entered in several decades ago to see if they bore any resemblance to reality, and over time, prices got massively inflated. These are the hospital’s baseline prices. If you don’t have insurance, or if a procedure isn’t covered, these are the prices you get charged.
These are also the prices that insurance companies start from when they negotiate better rates. Of course, a big insurance company with millions of customers has lots of bargaining power, and as such, they get a much better rate. The hospital can afford to discount deeply, because the baseline prices have nothing to do with their actual costs, but were set up so long ago in the Chargemaster database, and simply allowed to rise automatically over time.
It’s important to understand this, because when you start asking for relief from your medical bills, you need to realize that you’re actually not asking for a handout or any kind of special consideration. The price you see when you’re first presented with the bill has nothing to do with the hospital’s costs for the procedure, plus a normal markup.
What You Can Do About It
Burdensome medical bills are such a dilemma that most major hospitals have a financial assistance department, so if you’re looking a bill you can’t pay, by all means, start there. Generally, the staff assigned to these departments are helpful and understanding. They’ll do all they can to get your bill reduced, or see that you qualify for aid. This should be the first avenue you explore.
If you strike out there, consider retaining the services of a Medical Billing Advocate. These are professionals who know the system and can navigate to the right people in the hospital’s administration (decision makers) to get an answer in your favor. Their services don’t come cheap, and typically they’ll want a percentage of the money they were able to save you. Even so, this could amount to significant savings, depending on how much your bill is.
Sometimes, you get stuck with a big bill, even though you have insurance. Insurance companies are notoriously bad for denying claims for just about any reason. They like collecting your premiums every month, but they sure don’t like to pay out! Fortunately, if you dispute their refusal to pay and start making a fuss about it, they’ll generally play ball, because they like to avoid bad publicity. It’s the classic case of the squeaky wheel getting the grease.
While there are relatively few Federal programs that offer help with medical expenses, most county and state-level governments have at least a few programs designed to help people in their localities weather tough financial storms caused by medical bills. These vary widely from one area to the next, so your best bet is to contact your local social service agency and simply ask what programs are offered in your area.
You’re especially likely to be approved for these types of programs if you can demonstrate some additional hardship over and above the medical bills themselves. For instance, if you’ve been laid off, and are currently unemployed, you’re very likely to be accepted into the state/local programs that are available.
If none of the above works, your next best bet is to go the grassroots route. Consider starting a GoFundMe or similar crowdsourcing campaign. Explain your situation, market your campaign, and see what assistance comes from it. That can be pretty hit or miss, and is largely dependent on how effectively you spread the word about your campaign, but there have been a number of inspiring success stories. Certainly enough to warrant giving it a try. After all, the worst thing that could happen is that nobody helps, but nothing ventured, nothing gained!
As a last resort, consider bankruptcy as an option. Discuss your situation with a bankruptcy attorney to determine how filing for bankruptcy can help you. This will, of course, erase all your debts (except student loan debt, which is exempt from bankruptcy proceedings), but it will stay on your credit report for seven long years, during which time, you won’t be able to get a loan for much of anything, and even after it disappears from your credit report, you’ve still got a long road ahead of you to rebuild your credit score to its former glory.
The bottom line here is that if you’re struggling to pay you medical bills, there’s help available. It’s not always easy to find. It takes legwork on your part and persistence to get someone to pay attention, and ultimately, to lend a helping hand, but the reality is that there are a variety of programs out there. You don’t have to go it alone. There are people who are willing to help, but of course, they won’t know they should until you find them and present your case.