Every family encounters the occasional unexpected medical bill. But what happens when you’re suddenly hit with an onslaught of bills and you are struggling to pay them? Here are six steps to follow when dealing with medical bills.
- Open up your bills! Resist the urge to bury your head in the sand and hope the bills will go away. They won’t. They’ll go into collections and will still need to be paid at some point.
- Make a list of all of the bills, as well as their total balances. Medical bills don’t accrue interest, but they must be paid on-time to avoid fees, penalties, or going to collections.
- Set up a monthly budget for paying medical bills. Choose a fixed amount that you can apply each month to your bills. If you can find $100 in your budget, or more, make that a fixed cost, not a variable expense.
- Once you decide how much you have available to pay, take the total amount of your bills and figure out what percent of the total amount due will bring you to your budgeted amount. For example, if I owe $2500 in medical bills, I can calculate that 4% of the total owed is equal to $100 monthly. Using this information, I could apply 4% across all my bills as such:
Anesthesiologist- $500 x 4%= $20
Hospital bill- $1500 x 4%= $60
Doctor Bill- $500 x 4%= $20
5. Now that you know how much you can pay per bill, contact the billing department for each bill. Let them know that you have budgeted for payment of the bill and you can pay them X dollars per month. YOU MUST get an agreement in writing from the healthcare provider allowing you to make partial payments. Even if you voluntarily make partial payments, but don’t get an agreement in writing, your bill can be sent to collections.
6. If the healthcare provider refuses to accept your partial payments, you still have some options- albeit not great ones. First, you could allow the debts to fall into collections, then negotiate payment at a fraction of the cost. This will hurt your credit score, but in cases where your health care provider will not work with you, it may be the next-best alternative. Finally, if your debt is large enough, you may find that the only way to avoid a lawsuit is to file bankruptcy. Again, this is not a great option, but if there’s simply no way to make the payments your healthcare providers require, this is an alternative.
Huge medical bills can feel overwhelming, and can derail your efforts to get out of debt and build wealth. If you currently don’t have any medical bills, NOW is the time to begin setting some money aside each month into an emergency fund or an HSA account. Medical costs DO happen. Be proactive and be prepared to meet those costs so that you won’t have to worry about them when you and your kiddos are needing to focus on recovering. Remember, financial health is every bit as important as physical health!
Be well, mamas!