Strategies for Negotiating Medical Debt Settlements

Getting sick or injured can be super stressful. But then finding out you have medical bills that you can’t pay is even more stressful! Medical debt is a huge problem here in the U.S. – nearly 1 in 5 Americans have medical bills that have gone into collections. That’s a lot of people struggling with medical debt!

But there are things you can do to try to lower the amount you owe. This article will walk you through how to negotiate with medical providers and collectors to try to settle your medical debt for less.

First Steps When You Get a Collections Notice

If you get a notice that a medical bill has been sent to collections, don’t panic! Here are some important first steps:

• Request proof of the debt – collectors have to provide this if you ask
• Check your credit reports and dispute any errors
• Stop collections calls by sending a cease and desist letter

Be sure to keep copies of any letters and paperwork you send. Send letters by certified mail and request delivery confirmation so you have proof it was received.

Getting Help Negotiating

Negotiating with healthcare providers and collections agencies can feel really intimidating. If you need help, consider hiring a medical billing advocate – they are professionals who can negotiate lower or eliminated debt on your behalf.

You may also want to contact legal aid groups in your area to see if they can provide advice or assistance. Many provide free or low-cost help to people struggling with medical debt.

Negotiation Strategies

Here are some tips for negotiating medical debt yourself:

• Be persistent and patient – negotiating takes time
• Keep detailed records of all calls and correspondence
• Be polite but firm when stating what you can pay
• Offer to pay in installments if you can’t pay in full
• Mention financial hardship and ask if they have financial assistance
• Don’t be afraid to walk away if they won’t negotiate

Negotiating with collectors takes patience and persistence. But staying organized, being polite yet firm, and knowing your rights under the Fair Debt Collection Practices Act can help in getting your medical debt reduced.

Strategies for Negotiating With Providers

It’s always best to try to lower your medical bills before they ever go to collections. Here are some tips for negotiating with healthcare providers:

• Negotiate costs upfront before getting any procedures
• Ask for an itemized bill and check it for errors
• Find out if the provider has financial assistance programs
• See if they offer discounts for paying the full bill promptly
• Ask if they can lower the bill if you pay immediately
• Offer to make monthly payments if you can’t pay in full

Many hospitals and doctors are willing to negotiate with patients, especially if you pay quickly. Being polite and explaining your financial situation can help in getting them to lower your costs.

Using Payment Plans

If a provider or collector won’t agree to lower your overall bill, getting on a payment plan can help avoid further collections actions. Payment plans allow you to pay off the debt in affordable monthly installments over time.

When negotiating a payment plan:

• Calculate how much you can afford to pay each month
• Make sure the payment plan is affordable for your budget
• Get any agreement for a payment plan in writing
• Keep making payments on time to avoid collections

Having an agreed upon payment plan can help provide peace of mind that your medical bills will get paid off over time. Just be sure the monthly payment amount works for your finances.

Avoid Debt Settlement Companies

Debt settlement companies often promise to negotiate and settle your medical debt for pennies on the dollar. But dealing with these companies can be super risky! Here are some of the issues to watch out for:

• They charge expensive fees upfront before settling any debts
• Some creditors refuse to work with debt settlement companies
• The companies often fail to negotiate lower settlements
• You could end up getting sued by creditors anyway

In many cases, you’re better off negotiating medical debt yourself without paying a debt settlement company.

Avoid Bankruptcy

Bankruptcy may seem like an easy way to wipe out medical debt, but it should really be a last resort. Bankruptcy damages your credit for years and can make it harder to get loans, credit cards, utilities, and even jobs or housing.

Instead, exhaust all options for negotiating and settling your medical debt before considering bankruptcy. The strategies in this article can help you resolve medical debt through negotiation rather than bankruptcy.

Tips for Negotiating Medical Debt

Here are some additional tips for negotiating down your medical bills:

• Be willing to make a lump sum payment – providers may offer a discount if you can pay a large portion of the bill immediately
• Mention hardship programs – ask if the provider has financial assistance for hardship cases
• Offer to pay more than the collector’s offer – they often lowball so you can counter with a higher amount
• Get any agreement in writing before paying anything
• Be prepared to negotiate multiple times – the first offer may not be the best

Being persistent and following up with multiple negotiation attempts can help get the bills lowered as much as possible. Just make sure any settlement agreement is in writing first.

Other Medical Debt Help Options

If negotiating doesn’t resolve your medical debt, here are some additional options that may help:

• Apply for charity care assistance from the hospital – if you meet income requirements, your bill could be reduced or eliminated
• Set up a special savings account to fund medical expenses – a Health Savings Account allows tax-free savings for medical costs
• See if the bills can be consolidated into a lower interest loan
• Consider using home equity to pay very high medical bills

Don’t let medical debt stress you out. Being proactive in negotiating, exploring assistance programs, and finding creative payment solutions can help you finally resolve those frustrating medical bills.