Ever wondered how to negotiate medical bills over the phone? Whether you're uninsured, out of network, or you have a health insurance plan, I've got strategies for you.
Our incentive to negotiate medical bills increased greatly a few years ago when half of our household was laid off (the half with access to an employer-sponsored health care plan).
To stay on our old plan through COBRA would have cost us a staggering $1,837.82 per month, or an entire months' worth of unemployment pay and then some.
Obviously not an option for most (us included).
Up until November 1st of last year when we started on a $193.80, high-deductible health plan, I figured that a doctor's price was sort of like the extra value menu at McDonald's: a bunch of non-negotiable dollar amounts written on a fluorescent stone.
Sure, I'd gotten a glimpse into the world of medical negotiation in our healthcare system when I shopped around for a hernia operation to find out how much does hernia surgery cost, and found that different doctors charge WILDLY different prices for the same procedures. But I didn't know that you could actually haggle medical expenses (even if you have insurance, or you're not covered).
Here are the lessons I've learned from negotiating medical bills, of which has saved us $257 so far (and here we shaved $942 off of one of our pregnancy medical bills…though I take it as a ‘kinda' win):
Lesson #1: Not Having Insurance Gives you Almost Guaranteed Leverage When Negotiating
Wondering how to get out of paying medical bills? Well, you probably can't do so altogether (and, in most cases, it makes sense that you can't!).
But, if you are uninsured, then by all means tell your doctor's office before you go in for your visit to see about a discount. Negotiating medical bills ahead of time is always easier than doing it after the fact, and by telling them up front that you don't have insurance, they'll often slap on a discount to you.
For example, when I called up one of our doctors and told them our high-deductible plan does not offer the type of insurance that would cover them, they gave a pretty canned response of, “we offer a 35% discount for patients without insurance”.
This works in hospitals as well.
Lesson #2: Do Some Research for More Leverage
A great idea when negotiating medical bills is to research comparable prices. If you can show that the procedures or items you're being billed are less elsewhere, you have a reason to negotiate.
First of all, ask for an itemized bill. That way, you can see the charges broken down by what was actually done.
Then, check out both of these sites to get comparable price ranges:
Armed with this information, you can make a phone call and negotiate.
Psst: not understanding a code on your bill, or there's little explanation? Look up the medical billing code at Findacode.com.
Lesson #3: The Least Expensive Options are Not Often Prescribed (Unless You Ask)
Our healthcare company's prescription deductible is $500, which means that our health insurer will not pay one dime of the cost until we pay $500 out of pocket for the year on prescriptions.
Since we are fortunate enough to rarely need a prescription, this means that we have a lot of incentive to not hit that $500 point (once we do, it'll probably be the end of the year when we enroll in a metallic-plan, so the deductible will start over).
This strategy of cheap prescriptions drugs on an as-needed basis worked well for the first six months of our year when we had only needed one $19-antibiotic.
And then came the unexpected dermatology needs. When I rolled up to our local CVS to find that the the called-in prescription came to $400, glimpses of the beautiful weekend getaway we'll no longer be able to afford danced through my head.
So I got smart, and had Paul call the dermatologist back. He told them that we would have to pay for the prescription entirely out of pocket, and that there had to be a cheaper option.
And guess what? That simple request brought our cost down to $168! Discounts sure make it easier to pay your medical bills.
Lesson #4: Cash is King
Many doctors' offices will make you pay for the services up front or after the appointment (specifically when you don't have a health insurance plan). They want to make sure they get paid, and rightfully so.
However, if you are able to pay for something in cash such as a medical procedure, then you have more sway in negotiations. Think about it: what doctor office looks forward to the task of nagging their patients to pay their bills, or keeping up with patients on a monthly payment plan?
So if you can pay cash, then ask for a discount.
Psst: you can still try to negotiate a lower cost even after medical billing or hospital billing has done their job, especially if you're paying cash.
Lesson #5: Even Crappy Health Plans Now have some Great Benefits
With the new healthcare laws in place (Affordable Care Act), even if you are in some sort of transition plan until open enrollment period (like we are), you can still take advantage of a few great medical services benefits that will cost you nothing. Nada. Not even one cent.
- Women's annual wellness exam
- Annual physical for both men and women
The only kicker is that even though these appointments cost nothing to a person who has some sort of healthcare plan, you still need to find a doctor who takes your specific health insurance coverage.
I found this out when I tried to book one with my doctor of 5 years, only to find out that he does not accept our new insurance and so even though the exam itself was covered 100% no matter what type of insurance we were on, I had to find a doctor who took ours.
Lesson #6: You Can Outsource to a Medical Bill Negotiation Service – Medical Bill Negotiation Services
Feeling squeamish about negotiating with the medical industry? The good news is that there are medical bill negotiation services out there who will haggle on your behalf for a percentage of the total amount they save you.
For example, MedicalCostAdvocate.com will either negotiate a medical bill you've received that exceeds $300, or pre-negotiate a medical bill for you before an insurance claim is even sent in. Their cut is 35% commission on any savings gained. If they are unsuccessful in negotiating, then you pay them nothing.
Bonus: What do You Do with the Remaining Debt You Have to Pay?
There's still one more possible way to save money off of your medical bills.
And that's claiming the medical tax deduction on your taxes.
While researching for a medical tax deductions post several years ago, I ran across the rules involved with claiming medical tax deductions. I remember thinking to myself, “who would actually have to spend more than 10% of their income on health expenses to be able to take advantage of this deduction?”
I mean, 10% of someone's income is a lot of money, and if you're insured, then it seems unlikely that threshold would be met.
And then, it happened to us.
How We Reached the Medical Bill Deduction
We topped the medical tax deductions threshold for two reasons:
- Our income had been slashed in half with a job Paul found after being laid off five months earlier.
- The birth of our son was followed by a three-day stint in NICU and then a six-day stint where I had to go to the emergency room and be readmitted after leaving the first time.
Our Health Insurance Maximum Out of Pocket Protected Us
Even though our medical bills ballooned that year, they could have been far worse. To give you an idea, our son's three-day stay in the NICU was billed at over $39,000 to our insurance company. The birth alone was around $10,000. My stay in the hospital after being readmitted from complications was around $50,000.
Granted, you can negotiate with a medical provider, especially if you don't have health insurance. But still, our costs would have been much more substantial and panic-inducing without our insurance plan.
How the Medical Tax Deduction Works
This deduction is not meant to cover the occasional or typical medical costs you come up against each year, such as co pays to visit your doctor, or prescriptions. Rather this is a tax deduction to help those when their medical expenses have equaled a significant portion of their budget for the year.
Like ours did.
In fact, you can only deduct the amount of qualified medical expenses you paid that go above 10% of your adjusted gross income (or 7.5% if you or your spouse is 65 or older). So if you paid out $12,000 in qualified medical expenses, and 10% of your adjusted gross income is $10,000, then you can only deduct $2,000.
Here's a whole lotta more info on this, including what exactly is considered a qualified medical expense.
And if you want even more help in figuring out specifics for your situation, here's an interactive questionnaire from the IRS to see if you can claim this or not.
Nice Reminder to Buffer Your Savings to Cover Deductibles
You might think it's a pipe dream, but from experience I can say it makes this sticky situation much easier when you have enough money in savings to cover your deductibles. And not just health deductibles, but also your auto insurance deductible.
Honestly, I would shoot for having the amount of deductibles you need to meet on top of a normal emergency savings of 6 months' expenses.
On our plan, the annual, maximum, out-of-pocket that we can pay is capped at $4,500/per person, $9,000/family.
And we paid every penny of that $9,000.
Those were some of the hardest days of my life − a mother seeing her son go through the NICU, then being separated from him while living through a horrific, 6-day re-hospitalization myself.
Remember that medical staff are probably more used to negotiating medical costs than most of us think. I found this out after unknowingly stumbling into a negotiation at my dentist's office. They had scheduled two initial meetings, with the copay being $35 for the first one. When I got up to the front counter to pay for the second appointment expecting a $35 tab, she told me it was $75. Grimacing as a natural reaction made the staff member react quickly. “The cheapest I can accept is $50”, she volunteered. Just like that, without even asking, I had negotiated a $25 discount. And that was with dental insurance! Who knew?
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