Kellie Brown had rarely suffered from an ailment worse than a runny nose when she let her health insurance lapse.
Brown, 23, had always been covered by her father's plan. But when he retired, she lost her coverage, and "it just seemed like an expense that I didn't really need."
Big mistake. Less than two months later, Brown ended up making two financially devastating trips to the hospital: one to have her appendix removed and another, a few days later, to be treated at a different hospital for an infection resulting from the surgery. Altogether, her tab came to $40,000.
A visit to the emergency room, for yourself or a loved one, is no time to be haggling over prices or shopping around for a good deal. On the other hand, even if you're uninsured, huge medical bills don't have to bury you in debt or wreck your credit.
When she got sick, Brown was a junior at Virginia Commonwealth University, Richmond. She had few assets to speak of, and her parents were living overseas. When she told the hospitals about her financial situation, the hospital that had removed her appendix slashed her bill from $32,000 to less than $10,000; the hospital that treated her infection wouldn't budge on her $8,000 balance because it was below the $10,000 level that qualified for charity.
Instead of going right back to school, Brown picked up an office job. But you don't need to panic if your medical bills seem daunting. There are plenty of other options if you know how the system works.
Read your bill
If your balance from the hospital appears out of line, give it a reality check by requesting and reading an itemized bill. Pat Pane, a specialist in medical-claims assistance in Wilmington, North Carolina, who helps patients interpret their bills and appeal them if necessary, says she once worked with a woman who had been billed for four hernia surgeries when she had had only one.
If you don't find any errors but your bill still seems questionable, call your insurer to make sure a paperwork snafu isn't gumming up the works. A claim filed under, say, your maiden name instead of your married name could throw a wrench into the process. So could a medical procedure or diagnosis that was coded improperly.
Know your insurance
If your treatment falls into a gray area that your insurance may not cover, bolster your case by submitting letters from your doctors that explain why the treatment you received was necessary. And verify that you provided the insurance company with any required referrals from your primary-care physician.
Mark Rukavina, of the Access Project, a nonprofit group that works to improve access to health care, recommends that you submit official paperwork whenever possible. "Often people call their insurer's customer-service department and get discouraged," says Rukavina. "But sometimes you just need to file an official grievance to clarify whether something should have been covered."
Similarly, if you used an out-of-network service because of a medical emergency, make sure your insurance company is treating the episode as an emergency.
Don't use credit
What if four or more zeros still stare at you from your bill? Avoid the temptation to break out the plastic. When you apply for credit, owing money on a medical debt isn't viewed as negatively as, say, splurging on a Lexus, says Gail Cunningham, of the National Foundation for Credit Counseling, because "you don't choose to get sick."
But once you transfer the debt to a credit card, says Cunningham, you lose the benefit of the doubt. And don't convert your medical debt, which is unsecured, to a secured obligation by, say, paying it off with your home-equity line of credit.
And you do have leverage. The first thing to understand about your balance is that "the total charges bear no relationship to what the provider or hospital will accept as payment in full," says Nora Johnson, who runs her own business in Caldwell, W.Va., that helps patients appeal their bills.
Hospitals bill everyone the same, from Medicare to private insurers to the uninsured. But the full tab that appears on your bill is much higher than the hospital's actual costs. That's called the hospital's charges-to-cost, or markup, ratio, and nationally the average is about three to one, says Gerard Anderson, director of the Johns Hopkins Center for Hospital Finance and Management.
Anderson says any hospital should be able to tell you its charges-to-cost ratio, but you'll have to ask because the hospital won't necessarily volunteer the information.
Medicare traditionally compensates hospitals based on their actual costs, and private insurers that bring in many patients also have the clout to negotiate rates that are closer to a hospital's actual costs. Only patients who are uninsured or underinsured are expected to pay full freight.
But that doesn't mean you actually have to come up with the cash. You may not realize it, but unlike, say, buying a shirt at Macy's, "the health-care system is more like a bazaar where you can negotiate," Rukavina explains.
You could start by asking how much Medicare would pay for a procedure similar to yours. Armed with that information, go straight to the hospital's chief financial officer and ask for a reduction to the hospital's actual cost, plus 25 percent.
Bolster your case by showing you're serious about paying. A good way to do that is to offer to pay the discounted amount immediately once you secure a sizable reduction in charges. "We've seen prompt-pay discounts of up to 50 percent," says Rukavina.
Find a hired gun
A medical-billing advocate or claims specialist can help you figure out a reasonable amount to pay and can also assist you in making your case. "Hospitals and doctors get their attorneys, and patients get us," says Nora Johnson.
A hired gun can be a good option if your bills are exceptionally large or complicated. Individual advocates usually run their own businesses and set their own fees. Find a pro through the Alliance of Claims Assistance Professionals or the Medical Billing Advocates of America.