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Medical Bill Debt

It starts with a trip to the emergency room. Before you know it, your doctor bills are out of control. You are an honest person. You want to pay everything you owe, but you are being crushed under the weight of never-ending medical bill debt. Not everyone sinks into the financial quicksand with no hope of escape. Here's how you can fight your way back to a normal life:

How You Got Here

Medical bill debt sneaks up on you because of a few reasons. Some of them aren't your fault, but some of them are. First, an honest look at your budget is going to reveal a lot of facts about how much you save towards unexpected medical expenses. If you have little, or no, money saved up for health care costs, you have to fix this, pronto.

Being under-insured is another problem. Maybe you've got insurance but your employer's plan is a high deductible plan - you can't afford the deductible. This is another kind of savings plan problem. You must put together a savings plan to fill the gap between your deductible and the insurance coverage. If there's coinsurance (an additional amount you have to pay even after your insurance coverage kicks in), you're going to need to save up money for that too. It might be expensive, but what's your alternative?

Understanding Your Bill

Once you're saddled with medical debt, you have to know how to tackle it. The first step is to understand your bill. It might not be intuitive, and you might not understand all of the charges. That's fine, as long as you dig a little deeper to figure out what you've been charged for.

In a world that is dominated by 3rd party payers, it's become less common for people to question charges on a health care bill. When you're paying a deductible or coinsurance, however, auditing your bill may mean the difference between 2 months and 2 years of payments. The American Academy of Family Physicians can help you understand your bill better (source: Alternatively, you can contact your doctor or hospital directly.

Dispute Erroneous Bills and Find Billing Errors

Hospitals and doctors make mistakes. It happens. What's important is that you sort out any billing errors as soon as possible. If you suspect that you've been overcharged for some service, you can call the doctor's office or hospital directly to dispute the charges. The first thing you need is an itemized list of all charges.

Since health care providers often consolidate expenses, you might not receive an itemized bill from the get-go. Still, an exorbitant bill for simple services would be a red flag that something might be amiss. In general, it's a good idea to request an itemized bill before you ever pay anything - even when a hospital's internal policy requires that you pay for services immediately. You can refuse to pay the bill unless or until you get an itemized listing of every product and service you were charged for.

Look for charges for items like "shampoo," "Kleenex," "soap," "toothbrushes," "toilet paper," and "tray." It's not as though these are erroneous charges, per se. However, if you stayed in a hospital, and used any of these items, and you were charged for "room and board," there's a possibility that you're being overcharged. Contact the hospital and ask what's covered under "room and board." If basic supplies are included, you're being overcharged.

Clerical mistakes, like upcharges for more expensive services than those actually performed, are common when office staff are entering procedure codes. Contact your doctor to confirm what was actually done.

Once you have a list of potential erroneous charges, request a review or internal audit of your bill by your health care provider. Make every attempt to resolve the issue with the doctor or hospital first. Be civil, and polite. There's no need to go to war over a billing mistake. If your health care provider is being less than honest with you, you can escalate the issue. Contact your state's trade or consumer protection agency (source: If the issue is with your insurance company, you can contact your state's insurance commissioner's office (source:

Either government office can help facilitate a dispute resolution process, though they cannot offer legal advice or representation.

Paying Off Legitimate Debt

One of the best ways to pay off medical debt is to sit down, make a budget, and pay off all of your outstanding obligations. This is sometimes easier said than done, but it's simple in principle. You have to make more than you spend, accumulate savings, and use that savings to pay down medical bills.

Retirement accounts, cash value life insurance, annuity policies, and credit cards that are flush with cash make it simple to retire medical debts. Credit cards are the riskiest proposition of the bunch, since the interest on repayment is so high. However, if the choice is between paying off a credit card, and being sent to collections, consider charging up your card to pay off the debt.

Another option is to negotiate a payment arrangement with your health care provider. Your doctor or hospital wants to be paid. They're usually pretty open to payment arrangements as long as you make consistent payments and pay off the balance in a reasonable amount of time. Maintaining communication throughout the entire process is important. It keeps creditors off your back, and makes it easier to retire the debt and get on with your life.