Medical Bill Assistance

 

Payment Plans for Medical Bills

When faced with a medical bill that might take many months or even years to repay, many people panic. They begin to look at many options and forget that most medical service providers will allow payment plans for medical bills at zero percent interest.

Some may feel pressure to put the balance on their credit cards or to obtain special financing through a service like Care Credit. Doctors and hospitals love these financing options because it allows them to get paid in full right away. This is a rarity in medical billing, since most

medical providers expect to get paid substantially less than the list price and anticipate a delay in payment as well.

The problem though is that it costs you even more to finance medical costs, when the goal of repaying medical bills is to reduce what you have to pay. Instead of charging it, consider these steps to reduce your overall charges considerably.

  1. First, you need to work towards finding a reduction in your overall bill. Negotiating medical bills to obtain a reduction in some charges can lower your overall bill. Others may even be wiped out if you can prove they are unreasonably excessive. A $30 Tylenol pill is one example of a negotiable item that should be eliminated.
  2. Second, you will want to find a mutually agreeable plan to repay the remaining balance. There are a couple of ways to approach this. You may work directly with the billers or financial aid office to set up a payment plan. Be prepared to prove how a higher payment would not be feasible given your current financial constraints. If you do not want to discuss this directly with them, then you may try to implement your own payment plan.

In order to propose your own payment plan, you simply begin sending monthly payments. A letter to explain your payment plan is optional. What matters is making sure that they are accepting the payments that you can afford to make.

A good rule of thumb is to send at least $15 or 2% of the beginning balance, whichever is greater. This will allow for the medical debt to be repaid in full in exactly 4 years and 2 months. There is zero finance charges on most of these debts.

A $10,000 debt would be repaid in full if you made 50 monthly installments of $200. A $500 debt would take 32 payments of $15 and a final payment of $20.

Paying less than 2% is possible if it is all that you can afford. The lower you go, the less likely that it will be accepted as a payment plan and the more likely that it will become an interest-accruing collection account.

There are two primary bonuses to setting up payment plans for medical bills. No interest accrues on these accounts. This can save you hundreds or thousands of dollars over paying for medical costs using plastic or special financing. The other benefit is that it keeps the debt off of your credit report. A medical bill that is send to a collection agency will normally be reported to the credit bureaus, thereby reducing your score and potential borrowing limits.

If your payments are accepted, then that is generally a sign that your payment plan can proceed. If they return your check with a note that it is an insufficient payment, then you may wish to respond with a letter to explain your hardship as well as a higher payment to show good faith.

When money is tight, you can only do the best that you can. If it is not enough, then you may need to consider they possibility that a medical bankruptcy may be a more feasible way out.