Health

January 30, 2025

How to Avoid Financial Ruin After a Medical Emergency

By Ines Bellina

In late March of 2024, I woke up with a persistent ache in my upper torso that I immediately recognized as a biliary colic. I had been dealing with those symptoms since January and was stubbornly waiting to go to Peru, my home country, to finally get my gallbladder removed. Being hospitalized in the United States was one of my biggest fears — and that fear was purely financial. 

According to the Consumer Financial Protection Bureau, about 100 million Americans owe over $220 billion in medical debt. Even if you are insured, medical debt can still be an issue thanks to high deductibles,  co-pays, and other costs that insurance companies pass on to patients. Plus, it is estimated that insurers deny between 10 to 20 percent of claims and they are rarely forthcoming about their reasoning. 

I was already in a precarious state when it came to money. My freelance work was drying up. I lived in New York City, one of the most expensive cities in the world. After years of job losses and several moves, I had accrued an embarrassing amount of credit card debt. I had health insurance thanks to the Affordable Care Act, but my cheap plan came with a pricey deductible and co-pays. I did not have the kind of money to deal with any emergency, let alone a medical one. 

Unfortunately, my body did not care one bit about my carefully calculated plan. I was admitted to the hospital for a near-fatal case of pancreatitis due to gallstones. I spent a week in the hospital before undergoing surgery and then a week in the ICU because of a rare surgical complication. When I was finally released with a clean bill of health, I figured the other bill coming my way would wipe out every penny I had. A fear I shared with everyone I knew. However several people reached out to tell me they were able to significantly reduce their payments or have them outright forgiven. 

I was under the false impression that hospitals only offered medical assistance in extreme cases. In fact, “Hospitals are legally required to write off or reduce your bills if you meet the income requirements that they decide,” says Jared Walker, founder and Executive Director of Dollar For, a nonprofit that helps patients access hospital charity care. “Every three years, the hospitals do something called a community needs assessment. They find out what’s the average income and cost of living in the area and decide how generous their policy is going to be. There is no taking from somebody less fortunate. They decide the policy.” 

If I hadn’t opened my big mouth about the financial crisis my medical crisis was about to unleash, I would have never found out about my options. There’s no one way to manage this kind of debt — policies and resources can vary from state to state or even hospital to hospital. However, being your own advocate is a must. Here’s what I learned from doing just that.

1.  Make sure you have the right bill 

The hospital spent months tallying up costs and sending claims to the insurance company, often adjusting the amount I was supposed to pay. Even when payment due dates were fast approaching, I decided not to pay until the flurry of activity stopped and I had a clear idea of what I owed. Though letting bills lapse may sound reckless, unpaid medical bills can no longer impact your credit report and hospitals cannot legally send bills to collection until 120 days after they sent you your bill

You also want to check your statement is accurate by requesting an itemized bill. Having one on hand allows you to check the Current Procedural Terminology (or CPT) codes of your claim on websites like the Healthcare Bluebook to make sure the procedures listed match your experience. You can also use a service like Goodbill to see if there are any additional charges to contest or errors. “Just asking for one can lower the bill,” says Walker.  “They put bogus charges or upcharge you for things, which they’ll take out in an itemized bill.” 

2. Check if you are eligible for financial assistance 

When I first called the hospital about my situation, I learned I could request a hardship review. This entailed writing a letter explaining my financial situation and compiling every single bill I had into a PDF. The rep instructed me to add everything I paid for, even items like Netflix and credit card bills. Other hospitals might require a tax return or three month’s worth of paystubs. 

In the hardship letter, I described my financial duress and how my prolonged stay in the hospital caused me to lose freelance projects and billing hours. I felt I made a strong case, but don’t worry about the literary merits of the letter. “They really are just trying to get an idea of your financial situation,” says Walker. “Letting them know if you just lost your job or if you just had another child — just giving them a full understanding of your financial situation and the hardship that the bill is causing.”

3. Don’t be afraid to negotiate…again and again

A 2024 report found that negotiating with hospitals often pays off: 75 percent of survey respondents found financial relief, about 74 percent got a bill corrected and 62 percent saw their total amount reduced. But how do you start? “The magic words I use are, what is the settlement amount?” suggests Walker. “If I pay you in full right now, how much can I get it reduced?” 

According to his experience, patients can usually get 50 percent off their bill if they are willing to pay a lump sum at that moment. That still might be an unaffordable amount.  If that’s the case, a payment plan is a good option. Many hospitals offer them with no interest for a certain period, and you can usually set it to a reasonable monthly amount. 

If you still don’t like the number after the initial negotiation, try again. “I have called three, four, five weeks in a row and gotten the amount that I want,” says Walker. 

4. Follow up…again and again 

I scheduled follow-up calls every two weeks, where I would receive conflicting information about where my case was in the process or to whom I was supposed to direct my queries. After months of frustrating conversations, my phone call was passed onto a supervisor who claimed I had sent “insufficient information”, a telltale sign that my 107-page PDF was languishing in an inbox. This leads me to my final tip. 

5. Get mad

Even though I had repeated in every single call that my prolonged stay was the direct result of a complication that occurred on their watch, it wasn’t until I was audibly upset that the staff took me seriously. Despite my best attempts to be a lady, getting heated was the most effective tool I had. They gave me the direct line to a supervisor in risk management, the office in charge of legal compliance, and whose existence I was unaware of until then. After a brief conversation about my case and more weeks of waiting, I logged into my account to see a big fat zero. It was the best nothing I had ever received. 

ADDITIONAL RESOURCES

The podcast An Arm and a Leg focuses on stories about the cost of health care and what people can do about it. Several episodes focus on real life stories of patients who negotiated down their medical bills.

The Patient Advocate Foundation offers services and resources to patients offering chronic, life-threatening, or debilitating diseases, including medical bill negotiations and issues like insurance claim denials. 

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