Paying Medical Bills: Understand Your Options

In 2001, Jill and I had our first child, Maeve. Two years later, our dynamic duo, Phoebe and Sophie, joined the Cutter clan. Phoebe always reminds us that she became a member first, since she pushed Sophie out of the way on her way out of the womb. Three kids in diapers—fun times.

At that same time, I had just started my business, and we decided that Jill would give up her career as a pharmacist to stay home with the kids. I am not going to lie to you; it was the epitome of stress. Stress on our sleep schedule, stress on our marriage, stress on our financials. But just like everything I do in life, I was all in. Don’t get me wrong; those three little kids made me and continue to make me the happiest guy in the world, but, good heavens, it was a stressful time.

I was thinking back to that time recently, when I was counseling a buddy of mine, Bob, and his wife, Sara, who just had twins. The babies are their second and third children in as many years of marriage. Like we did years ago, now they have three kids in diapers. I told Bob that I remember those days and reminded him that just like anything in life, there is no gain without some pain.

But Bob and Sara are doing great. Tired, but great. As we talked, Bob mentioned having to pay off the hospital bills that he put on a credit card. Now, Bob has a pretty good job and he and his wife have good insurance, but there are still a lot of costs associated with having a baby (or two in his case). Bob explained that after some thought, he decided that the best solution was to put those charges on his credit card and attempt to pay it off before the interest rate would kick in and really start to hurt him.

You see, with this new frontier of health insurance, many of us now have to subscribe to high deductible plans to keep exploding monthly premiums down. This can also result in unforeseen out-of-network expenses. And it does not seem to be getting any better. So, I don’t think it’s a stretch to say that most people will, in their lifetime, come up against a medical bill, or bouquet of medical bills, resulting from a medical situation, that they simply do not have the financial resources to pay off immediately. So, this raises the question of what to do and how to handle these (usually) unexpected costs? Let me share with you a few ideas to ease in the recovery from these bills, if you find yourself recovering from any such medical issues.

First thing is to double-check your bills. This is no joke. Insurance coverage is not a simple thing to understand, and those bills, I believe, are designed to make it even harder to understand. Take the time to reach out to your insurance company. They can send you an itemized bill that makes things more clear and they can walk you through why and how you were billed for each item. Common mistakes can often be found; including things such as double billing, math errors, and charges for physician visits you never had. Those mistakes can add up to a significant amount of money that you should not be paying. I am not saying they are intentional in any way, but they do happen.

Another thing you can do is talk to your provider directly. Some hospitals and even some physicians’ offices will give discounts if you pay upfront, and remove the headache of dealing with the billing office. Some will give you a discount for paying in cash or with a check, rather than a credit card. Also, you can usually work with your insurance company to set up a payment plan, if necessary. By explaining that you are unable to pay the bill in full, but offering to pay down what you can right away, can show good faith on your part and is a great way to negotiate a payment plan. And folks, sometimes these payment plans can be arranged without interest.

There are also a lot of organizations that help with hospital bills, especially when the bills are incurred to treat a specific illness, or you are at or under a certain income level. Check online, or ask your local hospital or doctor if there are any such charitable organizations or support programs that could help you with your bills.

Lastly, when you have exhausted all other options and are looking at the final amount due, charging it to your everyday, high interest credit card isn’t your only option. Many doctors will accept “medical credit cards.” They are designed to help you pay off large debts, resulting from medical and/or dental treatment, over time, often without interest for the first few months. It is important to be aware of those interest terms, however, as many of these cards are based on “deferred interest” terms, that charge high interest rates if you do not pay off the balance by a certain deadline. It’s important to look at those terms and be realistic about whether you can pay off the bills before that deferred interest kicks in. If you are not confident that you can meet that deadline, you might be best served to put the charge on your regular credit card.

Medical bills can make those stressful medical situations, well, a bit more stressful. As always, there isn’t a right or wrong way to handle those bills, but there are solutions that may help your individual situation. The important thing to remember is that, no matter what solution you choose, you have options.

Bob and Sara will be just fine. They have two beautiful and—more importantly—healthy, newborn babies. The next couple of years will be a bit of a blur with three kids in diapers, but I told Bob that each and every day it gets better and easier . . . in some respects. Well, unless you have three teenage girls!

Be vigilant and stay alert, because you deserve more.