How to get relief from unexpectedly high medical bills (2024)

NEW YORK (AP) — Unexpectedly high medical bills are common in the United States, but there are ways to get relief. According to the Consumer Financial Protection Bureau, one in five Americans are affected by outstanding medical debt, for a total cost of $88 billion.

In a 2022 study, the bureau found that roughly 20% of U.S. households report that they have medical debt, with collections appearing on 43 million credit reports. As of the second quarter of 2021, 58% of all bills in collections on credit records were medical bills.

Medical debt affects households unevenly, too, according to the agency. Past-due bills are more prevalent among Black and Hispanic people than white and Asian people, and medical debt is more common in the Southern U.S., in part because states in that region did not expand Medicaid coverage.

While the process of fighting high medical bills can be time-consuming and frustrating, advocates stress that patients shouldn’t be intimidated by the system. If you’ve received a surprise medical bill, here’s what you should know:

Always see if you qualify for charity care

When Luisa, 33, received a medical bill for over $1,000 after an emergency hospital visit for a viral infection, she was able to have the whole amount covered by the hospital after appealing to their financial assistance policy.

“At first I thought it was just a cold, but it turned out to be something I needed specific medication for,” said Luisa, who asked to be identified only by her first name due to privacy concerns. “It was really bad by the time I went to the ER.”

This article is part of AP’s Be Well coverage, focusing on wellness, fitness, diet and mental health. Read more Be Well.

Luisa had heard about the patient advocacy organization Dollar For thanks to a viral video, and she filled out the nonprofit’s online form after receiving her surprise bill. The organization contacted the hospital, which was based in central Florida. Eventually, the hospital contacted Luisa directly to let her know she did in fact qualify for financial assistance. Even though she had already paid a portion of the costs with a credit card, Dollar For was able to get those payments refunded.

Laws governing hospital charity care require that nonprofit hospitals lower or write off bills for individuals, depending on household income. To determine if you qualify, you can simply Google the hospital along with the phrase “charity care” or “financial assistance policy.” Dollar For also provides a simplified online tool for patients to see if they qualify.

“Federal law requires hospitals to have these programs to keep their tax-exempt status,” said Jared Walker, CEO of Dollar For. “If you’re within their income range, they will write off, waive, forgive, or reduce your bills.”

Even if you’ve already been paying off medical debt, the hospital will be required to refund the payments you’ve made, he said.

“It was my first time going through something like that,” Luisa said. “I tried to be an informed consumer and ask questions when I was in the hospital about the costs, but obviously it’s hard when you’re sick in the emergency room.”

Appeal to the No Surprises Act

While protections against surprise bills have long existed for those who have Medicare, Medicaid, and Tricare, laws are now also in place for those with private or marketplace insurance.

The federal No Surprises Act covers people who have insurance through their employers, the marketplace, or individual plans. It says that insurance companies must reasonably cover any out-of-network services related to emergency and some non-emergency medical care. That means that if you’re being charged more than you’re used to or expect when you receive in-network services, that bill may be illegal.

To challenge any bill covered under this law, you can use the free help desk and hotline of the Centers for Medicare and Medicaid Services. Many states also have free consumer assistance programs to help with disputes and insurance questions. You can always contact the medical billing department of any hospital in writing to say that you believe a bill is in violation of the No Surprises Act and ask the hospital to deal directly with your insurance company.

“The complexity of the system itself is as big a problem as affordability,” said Kaye Pastaina, who heads research on patient protections for KFF, a nonprofit health policy organization. “A lot of it is from the fragmented system and complex rules, but also lack of awareness about existing protections that are a part of federal law that might help.”

Ask for an itemized bill

Even if you don’t qualify for charity care or you’re not sure your bills are covered by the No Surprises Act, you may be able to reduce the charges.

Medical billing is notoriously byzantine and rife with errors. Anytime you receive a bill, ask the hospital or healthcare provider for an itemized bill that includes the billing codes of all the care you received. The Health Insurance Portability and Accountability Act (HIPAA) mandates that providers share this information.

Next, check whether the billing codes are accurate. Again, simply Googling the codes with the phrase “medical billing code” can help. If something is off, contesting your bill with your medical provider or physician’s office can yield changes.

Another approach: comparing the bill with insurance companies’ estimates of fair charges for services. If the price you were charged is more than average, you can have your costs lowered. You could even take the provider to small claims court over the discrepancy (or let them know you have a case).

Finally, compare your insurance company’s “explanation of benefits” to the bill. This explanation of costs covered and not covered must match the hospital’s bill. If they don’t, you have another reason not to pay, and to ask the provider to work with your insurance company further first.

Remember the process requires persistence

Despite the hassle, these steps can save you considerable sums of money. Even after taking these steps, you can always appeal health claims with your insurance company, if you think there is any reason the bills should be covered entirely or more than the company initially decided. You can also contact your state insurance commissioner for support.

“What we’ve seen in our research and the data is that those folks who appeal — and there are few who appeal — but for those who appeal, there’s a high level of overturning,” Pastaina said.

___

The Associated Press receives support from Charles Schwab Foundation for educational and explanatory reporting to improve financial literacy. The independent foundation is separate from Charles Schwab and Co. Inc. The AP is solely responsible for its journalism.

How to get relief from unexpectedly high medical bills (2024)

FAQs

How to get relief from unexpectedly high medical bills? ›

Appeal to the No Surprises Act

What is a hardship letter for medical bills? ›

A hardship letter is a formal letter that you write to your healthcare provider or insurance company to request assistance or a payment plan. The letter should explain your situation, provide evidence of your financial hardship, and explain why you are unable to pay your medical bills.

What do you say to negotiate medical bills? ›

How to Negotiate Medical Bills
  1. Ask for a detailed bill. ...
  2. Make it clear that the current amount represents a hardship. ...
  3. Ask about available discounts. ...
  4. Express a willingness to pay to your best ability. ...
  5. Be persistent (and polite) ...
  6. Appeal insurance denials. ...
  7. Suggested script for negotiating your medical debt.
Jun 28, 2023

What is one recommendation you have for someone who is struggling to pay their medical bills? ›

Negotiate Your Bill

Talk to someone as soon as you receive your bill and you have verified its accuracy. If you have low income or are experiencing financial hardship—even if the hardship is due entirely to your medical bills—request hardship assistance.

How to handle large medical bills? ›

How to pay huge medical bills on a small income
  1. Ensure charges are accurate.
  2. Ask about a discount and negotiate the payment amount.
  3. Set up a payment plan.
  4. Find financial assistance.
  5. Look into medical credit cards.
  6. Consider a personal loan.
  7. Contact a medical bill advocate.
  8. Contact an attorney.
Dec 13, 2023

What is proof of hardship? ›

Provide supporting documents along with your hardship letter to help prove the legitimacy of your claim. Depending on your situation, you might submit documents such as an unemployment notice, medical bills, military orders or a divorce decree.

Can you take a hardship withdrawal for medical bills? ›

For example, some 401(k) plans may allow a hardship distribution to pay for your, your spouse's, your dependents' or your primary plan beneficiary's: medical expenses, funeral expenses, or. tuition and related educational expenses.

What to say to get your bills lowered? ›

Consider asking about specific deals you might be entitled to—students, military personnel, and veterans are often eligible for certain discounts. And of course—mention you're looking to switch providers. “They usually want to retain you as a customer,” says Roth. “So there is room for negotiation.”

How do you negotiate a medical bill collection? ›

You might be able to settle medical debt and pay less than the full amount billed. Medical care providers and debt collectors regularly offer payment plans, and help patients pay less using financial assistance programs or by settling the debt.

Do medical bills affect your credit? ›

How long does medical debt stay on your credit? Medical debt is not reported to credit bureaus as long as it remains with your healthcare provider. If you don't pay the bill for at least three months, however, your provider may sell it to a collections agency. That's when it can ding your credit score.

Is medical debt being forgiven? ›

Thanks to the American Rescue Plan (ARP), states, counties, and cities are canceling an estimated $7 billion in medical debt for up to nearly 3 million Americans, including: Arizona is using ARP funds to relieve an estimated up to $2 billion in medical debt for up to 1 million Arizonans.

How do you help someone who is struggling to pay bills? ›

Contact your provider and ask what they can do to help. They might agree to: reduce your bill. give you more time to pay.

What happens if you can't afford healthcare in America? ›

By federal law, nonprofit hospitals must offer financial assistance to those who cannot pay their bills. Some states also have other laws about uncompensated care, such as Washington, where all hospitals must tell patients about financial assistance programs when they receive care.

What protects you from unexpected or expensive medical bills? ›

The No Surprises Act protects people covered under group and individual health plans from receiving surprise medical bills when they receive most emergency services, non-emergency services from out-of-network providers at in-network facilities, and services from out-of-network air ambulance service providers.

How do I hide assets from medical bills? ›

Setting up an irrevocable trust can help protect your assets from medical expenses, as the assets covered by the trust cannot be claimed by creditors. Another way to protect your home can be by transferring the ownership to a family member. This can protect your home from being seized to pay medical bills.

Why are medical bills so high? ›

The complexity of the U.S. healthcare system can lead to administrative waste in the insurance and provider payment systems. The consolidation of hospitals can lead to a lack of competition or even a monopoly, granting providers the opportunity to increase prices.

What is an example of a good hardship letter? ›

I am writing this letter to request assistance with my personal loan during a time of financial hardship. Approximately two weeks ago, I was let go from my job due to company-wide layoffs. As a result, I have been unable to continue making regular payments on my loan.

What qualifies for hardship? ›

Reasons for a 401(k) Hardship Withdrawal

Burial or funeral costs. Costs related to purchasing a principal residence. College tuition and education fees for the next 12 months. Expenses required to avoid a foreclosure or eviction.

What should not be included in a hardship letter? ›

When you write the hardship letter, don't include anything that would hurt your situation. Here are some examples of things you shouldn't say in the letter: Don't say that your situation is your lender's fault or that their employees are jerks. Don't state that things will likely turn around for you.

Do hardship letters work? ›

Hardship letters can be a crucial part of your debt resolution. If you have bills to pay or need a payment plan to catch up, a letter may be the right nudge you need to convince lenders to work with you.

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