How to handle a health care bill you can't afford

Published June 7, 2015

Just because you have health insurance doesn't necessarily mean you can afford all your medical bills, especially if you have a high deductible. So, sometimes it pays to negotiate.

A Commonwealth Fund study found that nearly a quarter of working-age Americans who had health insurance in 2014 were "underinsured." The report cited rising deductibles — the amount you must pay for care before insurance coverage begins — as a growing factor.

High deductibles squeeze many families because most Americans lack significant savings to help cover sizable bills. "Most Americans don't have that much money in the bank," said Karen Pollitz, a health policy expert with the Kaiser Family Foundation.

Consumers may be interested to know that the amount of a medical bill is not necessarily set in stone, said Erin Singleton of the Patient Advocate Foundation, which assists people with chronic conditions. You can ask whether a discount can be applied or whether the hospital has funds available for patients with a financial hardship.

Often, people are embarrassed to talk to professionals about discounting their bills, said Martin B. Rosen, a co-founder of Health Advocate, which helps patients with employer-based coverage. But, he said, "There's no harm in asking" — just be polite.

Singleton noted that many high-deductible plans could be used with a tax-favored HSA, a health savings account, which lets users set aside money for health costs. If you don't use the money, it rolls over into the next year. Building a health savings account through periodic deposits can help you set aside money for medical expenses subject to your deductible.

Here are some questions about managing medical bills:

How can I keep my medical bills as low as possible?

Start by understanding the details of your health plan. Going to an out-of-network doctor or hospital, for instance, will cost you more. Many people make the mistake of choosing a plan based on its monthly premium alone, said David Blumenthal, president of the Commonwealth Fund, but it's wise to consider your overall health costs. It may make sense to choose a plan with a higher premium but a lower deductible. You can also ask about lower-cost options — like whether an operation can be done in an outpatient clinic, rather than in a hospital, Singleton said.

What's the best way to handle a medical bill I can't afford to pay?

Contact the doctor, hospital or lab to discuss it — sooner rather than later, Singleton said. Providers may offer payment plans, or even a discount on your bill, but they have more flexibility before the account is sent to collection, she said.

Providers may be more likely to offer a discount if you can pay in full right away. "If you can offer full payment in cash, it's appealing and a lot of them will make a discounted offer," said Stephen D. Neeleman of HealthEquity, which administers health savings accounts.

How much of a discount should I ask for?

It helps to know approximately what other people are paying. The Patient Advocate Foundation suggests using resources like the Healthcare Bluebook or Fair Health's consumer website to get an idea of what average costs are. Then you are negotiating from a stronger position. "You can say, 'I see that other providers are charging about 25 percent less, would you take 25 percent off my bill?' " Neeleman said.