What To Do When Your Medical Bills Reach $1,000, According to Experts
Written by
Yaël Bizouati-Kennedy
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Chris Cluff
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Even with healthcare insurance, medical debt can add up quickly and take a toll on financial well-being. And if that’s your case, you’re not alone. Indeed, a recent analysis, by Peterson Center on Healthcare and KFF, showed that 20 million people in the U.S. — 1 in 12 adults — owe medical debt. In addition, 14 million people (6% of adults) owe more than $1,000 in medical debt and 3 million people owe medical debt of more than $10,000.
These bills can also sometimes derail financial plans and affect one’s quality of life.
Indeed, a recent report from Goodroot on medical debt also found that 38% of Americans have at some point been unable to afford rent, groceries or utilities because of medical bills. What’s more, 86% of Americans who have experienced medical debt have put off care due to the anticipated cost.
“Managing medical debt effectively involves several key steps,” said Peter C. Earle, senior economist at American Institute for Economic Research. “To the extent possible, avoid incurring new debt and consider consolidation options to streamline payments and reduce overall interest costs. By taking proactive steps to address medical debt and leveraging all available resources, individuals can usually navigate healthcare expenses more effectively.”
Here are some steps experts recommend taking to get rid of your medical debt.
Check for Errors
In 2024, patients are facing ever-growing premiums, deductibles, and out-of-pocket costs before the benefits of the average insurance policy will pick up the bills for medical services, said Daniel Lynch, president and co-founder of Medical Bill Gurus.
Lynch said that it is estimated that 7 out of 10 medical bills have errors in them, and as such, it is crucial to be extremely vigilant when you receive them.
“The average person does not actually understand how their insurance coverage works until they receive a bill in the mail saying they owe more money than they feel is warranted for the services,” he said.
Yet, he said that while an explanation of benefits (EOB) statement is typically sent to patients, most of the time this provides no clarity as it is written withconfusing codes, modifiers and line items.
In turn, Lynch recommended requesting an itemized breakdown of all services, with documents including medical bills; invoices from providers; itemized statements from providers; and medical records from providers.
Apply for Hospital Financial Assistance
All non-profit hospitals — which is most hospitals — are required to offer free or discounted care to patients who qualify based on income and eligibility is typically based on a multiple of the local poverty line, as much as 400% or even 600%, which can easily be an income of $120,000 per year for a family of four in many areas, said Mike Waterbury, CEO of Goodroot.
These financial assistance programs are also sometimes called “charity care,” and provide free or discounted health care to people who need help paying their medical bills, according to the Consumer Financial Protection Bureau (CFPB).
“Hospital financial assistance can be applied to care retroactively in most cases within a certain period of time,” he added.
Ask for a Payment Plan and Negotiate the Bill
According to Waterbury, hospitals and providers will sometimes offer patients payment plans ahead of encouraging them to apply for financial assistance programs. He noted, however, that while payment plans can be useful, they should be a last resort.
“Make sure that you’ve tried applying for hospital financial assistance, looked for billing errors, and negotiated with the provider before you enter into a payment plan,” he added.
And Medical Bill Gurus’ Lynch also recommended never offering to pay the full amount of the bill, as there is typically room for negotiation based on how much cash can be secured in the quickest period for the provider.
“Ask the provider to outline both payment plans and/or what discounts are available if a certain amount could be paid upfront today to close out the case,” he said.
Negotiating bills is a common strategy for large hospital bills, according to Erika Kullberg, attorney and founder of Erika.com. She further argued that many billing departments would rather receive “a decent chunk of your overall payment now than hope you’ll pay it off in full one day.”
Finally, Kulberg said that “a phone call never hurts and can save you a lot of money.”
“If you don’t get the answer you’re looking for, you can always try calling again on another day to see if someone else is more willing to help,” she added.
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