00:00 Speaker A
Walk us through what you should do when you first get that medical bill in the mail.
00:06 Kristen
Sure. So, first I would recommend opening the bill. It’s human nature to want to ignore it, um, put it aside and wait for later, but it’s really important to, um, open the bill and look at it. I would then scan for any inaccuracies. There are many inaccurate information on medical bills. And so it’s important for you to look through it. Um, look at the explanation of benefits from your insurance company, and then talk to the medical provider as well, even requesting an itemized expense list to make sure that everything is accurate.
00:51 Speaker A
This seems so obvious, and yet I have been guilty of this so many times where I just throw it on the pile and forget about it until I feel like I I need to. And sometimes it’s too late. So let’s talk about what happens next, presuming everything is correct there. Give us some options for people who may have trouble paying that bill.
01:15 Kristen
Absolutely. And you do have options. The first option I would say is to, um, call up the hospital or the medical provider and ask if they provide financial assistance or charity care. Many do, and many are required to provide financial assistance. Um, and so it’s important to see if you can qualify. You do need to know that you have about a 240 day window to check to see if you qualify for that financial assistance. If you are outside of that, um, 240 day window, I would still look to see if you qualify for financial assistance. Um, there is a great non-profit organization called Dollar For that does help individuals walk through that, um, financial assistance application for each individual hospital. Um, if you don’t qualify for financial assistance, you still have other options. One is going to be to talk to the hospital or the medical provider and see if they’ll negotiate a payment with you. So let’s say you owe $200 bill, a medical bill. Um, they might settle that or negotiate that for $150. You would need to be, um, bring it in a lump sum. So they’re not going to do a payment plan on that negotiation. Um, but many medical providers will negotiate, um, a medical bill. And then lastly, um, you could also always do a payment plan. Um, and even a $5 or $10 monthly payment plan may keep you out of going into collections. It’s just something that you’re going to need to ask that hospital or medical provider.
04:05 Speaker A
And then, Kristen, in in terms of some other best practices for medical bills, what about putting them on a credit card, for example, why should you be careful of doing that?
04:20 Kristen
Yeah. So, I typically don’t recommend putting a medical bill in, um, onto a credit card. Um, now if you’re going to pay that credit card off in full, as soon as you put it on and you want to get rewards or points, that’s fine. But if you’re going to put a medical bill onto a credit card and then pay like the minimum payment over time, there’s going to be two kind of issues with that. One, you’re going to start to accrue interest, and credit card interest rates are at a, you know, very high right now, anywhere from about 25 to 30%. So that medical bill that was maybe $2,000 is now going to cost you a lot more money over time. The second is that there are protections that come with medical debt. Um, as you stated, medical debt doesn’t hit your credit report, um, until it is one year old. If you put that on a credit card, you are now turning that medical debt into a consumer debt. If you default on that credit card and it goes into collections, that credit card debt is now going to hit your credit report and you lose that kind of medical debt protection.
05:57 Speaker A
So if you, um, don’t pay the bill and, um, and you get called by a collection, um, agent, does that mean it’s already on your credit report?
06:16 Kristen
Yeah. That’s such a great question. So, just because it’s in, um, a collection agency is calling you, it does not mean it’s on your credit report. Uh, remember that that, um, collection can’t hit your credit report, um, until it’s one year old. But a lot of times what happens is that the medical provider or hospital will try to collect on that debt for maybe three months or four months, maybe up to six months. But then after six months they are going to, um, send that to a collection agency, and the collection agency is going to try to collect that. And they have between that that time period that they get it until it’s one year old to then put it onto your credit report.
07:24 Speaker A
Gotcha. And then what if you pay your medical bill, but it’s already gotten onto your credit report by the time you pay, is that then sort of on your permanent record, so to speak?
07:42 Kristen
Yeah. So, another, um, positive, um, protection with medical debt is that if it does go into collections and it hits your credit report, but then you pay it, that collection will come off of your credit report like it never happened before. So, it just is removed and and you would not see it on your credit report anymore and and lenders wouldn’t be able to see it. Unlike non-medical collections that stay on your credit report for seven years, um, even if you do pay it.
08:28 Speaker A
So that’s so interesting that medical debt is so unique. Uh, Kristen, appreciate it.
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