When Lorie Duff was pregnant with her third child, she did what all good moms are supposed to do. She went to the OB/GYN clinic for prenatal care. But she fell behind on the clinic payments. She only made about $25,000 a year managing an auto parts store while her husband stayed home with their kids. The out-of-pocket expenses were outpacing her ability to pay.
That’s when she found herself on the phone with a debt collector, who demanded a minimum of $400 to help her out. She knew if she didn’t do that, things would get even uglier. She was in a state of panic, with collectors calling almost every day to wrestle money from her. She was convinced the next caller would inform her she had lost her house.
Unknown to Duff, she was eligible for financial assistance from the hospital, which had turned her unpaid bills over to a collection agency. If she had expressed her financial concerns to the hospital earlier on, she never would have found herself in a position where every time she saw a stranger walking in her neighborhood, she worried it was a repo man.
In normal consumer markets, people owe what they owe. In fact, consumers often can’t purchase goods or services until they pay for them in advance. But in health care, patients usually receive services before paying the bill, often (as we’ve seen) before even knowing the price of those services. In part, this backwards relationship between payment and receipt of services occurs because patients require urgent treatment, and providers don’t want to take time collecting money before taking care of their illness. Other times it is backwards because providers send the initial bill to an insurance company, not knowing how much insurance will pay versus how much the patient will be responsible for.
Once stuck with these bills, American health care consumers often don’t know how much they are required to pay. When Janice S. was on the wrong end of a $21,000 medical bill, she knew she would never be able to pay it off. That’s when, as Steve Brill writes in America’s Bitter Pill, she contacted Katalia Goencz from the Alliance of Claim Assistant Professionals. (You know a consumer market is screwed up when you need an alliance of claim assistance professionals!)
Goencz went to work negotiating Janice’s bill. As she told Brill: “I can pretty much always get [the price] down 30 to 50 percent simply by saying the patient is ready to pay the bill but will not pay $300 for a blood test.” She eventually knocked $10,000 of Janice’s bill.
Unfortunately, many Americans who face health care bills beyond their means don’t know about the Alliance or its sister organizations. (Yes, there are numerous trade associations focused on helping Americans negotiate health care bills.) Most Americans don’t know that, when they get charged outrageous sums of money for services not covered by health insurance, the price is just an opening bid in what, if they are savvy, will be a drawn out negotiation. And who can blame them for being in the dark? They sit in their living room, staring in slack-jawed awe at the enormous figure on the bottom of the page next to “amount owed,” wondering whether that living room will soon be taken away from them.
Here are a few things you can do if you get caught up in medical debt:
- Don’t assume that what you owe is what you’re going to have to pay.
- When in debt, try to negotiate payment with the health care provider.
- If they don’t knock off 30 percent, 40 percent or 50 percent from the bill, get help from someone who negotiates medical bills for a living.
Don’t think of unpaid medical bills as fixed debts. Think of them as an invitation to negotiate.
Peter Ubel is a physician and behavioral scientist who blogs at his self-titled site, Peter Ubel and can be reached on Twitter @PeterUbel. He is the author of Critical Decisions: How You and Your Doctor Can Make the Right Medical Choices Together. This article originally appeared in Forbes.
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