Tackle your medical debt with Life Kit

0:00Support comes from our 2025 lead sponsor of Planet Money, Amazon Ads. Less than half of customers fully trust their financial institutions. Amazon Ads helps financial brands build that trust through relevant ads using first-party signals to reach the right customers. More at advertising.amazon.com. This is Planet Money from NPR. Hey there. Today we have a special episode from our friends over at NPR's Life Kit. For a lot of people, a medical crisis is also a financial crisis. 40 % of adults in the U.S. have some kind of medical debt. We're talking credit cards, collection agencies, maybe the friend or bank you borrowed some money from.

0:48Our friends over at LifeKit have put together an episode all about how to lower medical bills. Because look, even healthcare debt is negotiable. Here's that episode.

1:02Hey everybody, Mariel Segarra here. About 10 years ago, Jared Walker says he and his wife were sitting at home when she got a phone call. It was bad news. Her aunt had passed away from cancer, and then a few minutes later I got a phone call. My cousin had gone into labor seven weeks premature. Baby needed a heart surgery to live, and both families kind of hit with these medical crises. And I remember hearing conversations like, how are we going to pay for it? That was Jared's first real run-in with the U.S. health care system. First time he realized that for a lot of people in the U.S., a medical crisis is also a financial crisis.

1:42A few years later, he started Dollar Four, now a national nonprofit that helps people eliminate their medical bills. And he says, if you're staring at a big, terrifying medical bill, first of all, you are absolutely not alone. There's an estimated$195 billion of outstanding medical debt in America. There's no shame this is not, you know, because of some failing on your part. You didn't choose to have a medical crisis. This has everything to do with a broken system and not you. But also there's a well-kept secret about the astronomical amounts on your medical bills. They're fake numbers. They can be negotiated.

2:19And many hospitals are actually required by law to lower your bill or get rid of it entirely if your income falls below a certain amount. Medical bills always seem urgent, especially when they say due upon receipt. But you should know that you have a lot of time before they're sent to collections or they affect your credit. And there is no, like, sense of urgency. You have to pay this now. You have time. You can take a deep breath, get a plan, and go from there. On today's episode, Jared and I are going to help you make that plan. We'll talk about how to apply for financial assistance, how to check your bill for errors, and how to negotiate.

2:57And we might just save you thousands of dollars.

3:04So let's say you get a big medical bill in the mail, I don't know,$5 ,000 for something that you had done. What is the first thing you should do? First thing I would tell people to do is see if you are eligible for charity care. and charity care is a federal law that went into effect with the affordable care act it's like the best kept secret of the affordable care act and it requires non-profit hospitals to have these policies they have to prove to the irs that they're providing community benefit so to keep their non-profit status they have to provide free or reduced care to patients within a certain income range typically a policy will say something like if you're at or below you know 300 of the federal poverty guideline, then you're eligible for free care or reduced care.

3:55So number one, see if you're eligible for charity care or financial assistance. Wow, that is a big secret. Nobody tells you that when they send you the bill. Absolutely not. I mean, you can call even the number on the back of the bill. It's always like, I'll call this number if you have trouble paying. It's like, you'd think that that would lead you to the charity care department, but typically it's like, we'll put you on a payment plan, you know, and nothing is standardized about this process. So you might be eligible at one hospital down the street and not eligible at the next. So, you know, what the hospital decides is their cutoff for income is different hospital to hospital.

4:33Sometimes there are state laws that bulk this up and have minimums and, you know, better protections, but typically it is different across the board. Okay, so that's for non-profit hospitals. Does it also apply to for-profits? So the federal law does not, but most every for-profit hospital will also have a charity care or financial assistance policy. It's just there's not a federal law saying that they have to. So they're typically a little less generous, but a lot of them still have them. And you can apply. We've gotten millions of dollars waived for people that are at for-profit hospitals. It's just a little tougher sometimes.

5:14Okay. So if I wanted to see if I was eligible, where would I start? Well there's two options. One you can always just google your hospital name plus financial assistance. Typically it's the first link. So if you are eligible then it just becomes find the application. So find the application. Typically it's like two pages. Who are you? Who do you live with? Where do you work? How much money do you make? And it's like then prove it. Proof of income. Pay stubs, tax return, all that. So you fill all that out and submit it to the hospital through whatever wacky way they do that, typically through fax or mail or whatever, and submit it to the hospital.

5:56And then you can wait a couple weeks and then just check in as often as you like. I typically bother them a lot about it. So if you don't qualify for charity care, what are your other options? So I'd always ask for an itemized bill. This is something that is annoying that we have to do, but we call the hospital. I have to ask for that itemized bill, which will have all the procedures you had done, and then they will have a CPT code associated with all that. And the CPT code is just the code associated with whatever happened to the hospital. So a certain scan that you have or whatever it may be, it'll have, you know, this is the code that is associated with that, and you can look up what those are and see if that actually happened.

6:37Because a lot of times you'll get a bill and it'll say, oh, you got this scan, and it never actually happened. Yeah, I remember actually having something like this happen when I went to get a hearing test. And I got the bill back and it said that I had some kind of ear procedure done that I definitely didn't. I looked it up. I did not know what it meant at first. But I looked it up and then I asked my brother because he's a doctor just to confirm. And it was something that you would know you had done because it was kind of invasive. And yeah, so I called the billing office and they were like, oh, no, that's always done with a hearing test.

7:11And I was like, no, well, it wasn't, you know. They ended up wiping that$54 off of the bill. Good on you. Yeah, no, that is super, super common that you would get charged for something that didn't happen. It's kind of wild to be getting into all this. The fact that this is how our health care system works, that it's on the patient then to look at the bill and be digging through the weeds like this? Yeah. It is wild. And it's like there's so much pressure on the patient to find. Like we shouldn't have to fact check the hospitals for these things, but we do. And there are people that go to school for years and years and take tons of tests just to figure out what these codes mean.

7:53And we're like over here Googling, getting on TikTok, trying to figure out how to figure out your medical bills. It's insane. All right. So you've tried all these things. Let's say that you're not eligible for charity care and your bill is technically correct. What can you do? You can negotiate. So the I always tell people the numbers are fake. They don't matter. Like it can always be lowered. so you can call the hospital and the first thing I ask is what's the settlement amount like what will you take right now if I can close out this account typically we can get 30 to 50 percent off just by asking that if I pay you right now what can I get lowered off this bill do you recommend that rather than being like I have$500 will you close it oh no never show your hand I would I would just say hey uh what's the settlement amount and then see what they'll offer um but they're not going to offer you the lowest amount right they're gonna it's a it's a whole game and even then like all if it's not a number that i like i'll just say okay talk to you later and then hang up call the next day and see if the next person like i have called three days in a row talk to a different person got three different numbers oh my gosh it is exhausting though especially if you're doing it on your own to keep calling back and keep having it on your calendar like it's this reminder of this debt hanging over your head but maybe also a reminder of something painful that you went through oh yeah I mean it is it's so hard there's so much trauma around like yeah you only have this bill because you had some medical emergency that happened so like if that is a you know that That can be super painful.

9:39And a lot of times, yeah, you do need an advocate. You might even be recovering from some surgery or, you know, going through chemo or whatever it may be. Like, you don't have the bandwidth to be calling the hospital all the time. It seems like an opportunity to allow your friends and family to support you in a concrete way. So maybe if a friend is like, hey, how can I help? How can I help? You can say, well, here's this list of things you could do. you could call the billing office for me. Absolutely. I have a few family members that I'm like, oh, if this were to happen to me, like I would call them because I know that they're going to call and be so annoying and they're going to get it done.

10:20You know, and like, I feel like a lot of people have someone in their network that's just like, yeah, I'll call the hospital on your behalf and I'll ask about the bill. I wonder what kind of mindset might people employ here? Like If you're trying to, if you're looking forward and you're like, okay, like I know it's not going to be resolved easily because I already called and it sounds like it's going to be a mess. How do you stay mentally healthy during that time? I typically tell people, find a place in your house that's not like somewhere that you are staring at all the time or whatever. Like put all the bills, stack up all the bills in a drawer, like set them aside.

11:06When it's time to deal with it, take them out, do your thing. Like, but don't let these things just, you know, fill your whole space. And, you know, there are like, I tell people like, yeah, you have to be like persistent and you have to have grit and you have to like get after it. But also it's like, you just got to buckle up. Like, it's kind of a battle and it's brutal. And if you're not in that space, like, get an advocate. Get somebody that can do it on your behalf. There's no shame in that. All right, it's time for some role play. So, like I was saying, I play the role of the person at the billing office.

11:44And Jared is going to play the patient. And fair warning, for some reason I got, like, really into this one. And I don't know, I feel like I might have an acting career ahead of me. Hello, my name's Jared Walker. What's your name? it's Mariel. Awesome, Mariel. I write that down. Always write that down. And then hey, I have a question about a bill that I just received and I'd like to... Okay, what's your billing number? What's the number on... What's the account number on the form? Account number is 1, 2, 3, 4, 5, 6. Repeat that, please. 1, 2, 3, 4, 5, 6. okay what's your concern so my concern is i'm looking at this medical bill that i got and uh i noticed that there's a charge in here that that i didn't actually have happen at the hospital and i'd like to dispute this bill um and i'm wondering what the email address is for that and the uh and the mailing address so i can send in my dispute for this error um yeah that's the code for uh an uh an ear snuffleupagus procedure um they we do that with all the the hearing tests and you had a hearing test done so that's um what that was would have been included yeah i actually actually know what the code was for because i because i'm looking at it here um and that never happened so i'd like to just get the address and the email address uh for where i can send this dispute for the error on the bill.

13:23It happened because the doctor has it in her notes here. I appreciate that. Can you just provide me the email address and the mailing address so I can send in this dispute? If you want to try. The email is billing at yourdoctorsoffice.com and the address is 555 yourdoctorsofficelane. Perfect. I will ship this off. Thank you. Thanks.

13:55Boom. There it is. So why did you say the things you said? I mean, I try and make those, like, those kind of discovery calls at the beginning. I try to make them as quick as I can just to be like, hey, I need this. I'm going to send this in. This is what's going to happen. I don't need to, like, get into all the details with you. I'm just going to do this thing because I know that that's what it is. Okay. But the person on the phone probably can't change the bill for you, but they might make you think that they're in control of what's on the bill. Yeah, definitely. They're going to make it seem like they know all about it and that you're not able to dispute it or whatever.

14:31You are. You can always ask for the supervisor, but really, they know the address. They know the email. Just get that and keep rolling. Okay, scenario two. Everything on Jared's bill is accurate, but he wants to negotiate anyway. Hi there. I have got this$1 ,000 medical bill, and I'm wondering if you all have a settlement amount for me to see if I can close this out today. Yeah, we sure do. We typically will accept 50 % of the bill if you pay up front. Yeah, I'd take that. Awesome. Let's do it. Okay, Jared. Pleasure doing business with you. Awesome. Thank you. I hope you're feeling better. Thank you.

15:12See, that one went so well. It did. I mean, it's, and sometimes they go that way, but it's really just like, there's always a settlement amount. There's always an amount that they'll take that's less. Figure out what that is. Figure out what they're going to offer. And usually it is. Yeah, it's like, we'll take 20 % off the bill. Call again tomorrow, see if you can get 30, 40, 50, like whatever it is. I liked her, by the way. She was really friendly. Oh, yeah. I loved it. She was trying to help. Yeah. Sometimes you get those, which is great. Okay. Recap time. When you get a medical bill, the first thing you should do is see if you qualify for charity care.

15:51If your income falls below a certain threshold, nonprofit hospitals will be required to lower your bill or get rid of it entirely. If you don't qualify, ask for an itemized bill and then comb through it. This is your chance to fact check your doctor's office or hospital. Did you actually have that procedure done? Now, you might find things on your bill that are accurate, but seem like an overcharge. like$100 for a couple bandages. Take note of those too and bring them up to the billing office. Also, you can always negotiate a medical bill. If you can afford to pay something up front, try calling the billing office and asking for a settlement amount, what they'll accept if you pay the bill in full that day.

16:30Jared says you might get them to cut the bill in half. And if you can afford that, you can still negotiate and you can get on a payment plan. That's much better than putting the bill on your credit card, by the way. Lastly, remember, this is a long game. You may not get anywhere with the first couple calls, but keep plugging away at it. And don't be afraid to ask friends or family for help. Sometimes they're looking for ways to support you, and you could really use an advocate. If you want to see the video version of this interview, check it out at youtube.com slash NPR podcasts. And for more Life Kit, check out our other episodes.

17:05We have one on how to cope with losing a friend and another on how to file your taxes this spring. You can find those at npr.org slash life kit. And if you love life kit and want even more, subscribe to our newsletter at npr.org slash life kit newsletter. This episode of life kit was produced by Sylvie Douglas. Our visuals editor is Beck Harlan and our digital editor is Daniel Nett. Megan Cain is the supervising editor and Beth Donovan is our executive producer. Our production team also includes Andy Tagle, Audrey Nguyen, Mia Venkat, and Claire Marie Schneider. Julia Carney is our podcast coordinator.

17:40Engineering support comes from Carly Strange, Patrick Murray, and Neil Tivolt. Special thanks to NPR's video team who helped produce this episode. Christina Shaman, Kaz Fantoni, Iman Young, Nikolai Hammer, Searing Bista, and Nick Michael. I'm Mariel Segarra. Thanks for listening.

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