'Your Rich BFF' Shares How To Reduce Medical Debt — Along With 3 Expert-Backed Hacks
If you’re one of the millions of Americans saddled with medical debt, you don’t need an expert to tell you that navigating it is frustrating. At times, it feels downright unfair. After all, medical debt usually represents a sad and scary moment in your life.
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Still, Vivian Tu, founder of “Your Rich BFF,” acknowledges how awful this debt can be. She opened a recent video by saying, “Don’t you think it should be illegal for your doctor to say, ‘Hey, my patient needs this treatment,’ but then for your insurance company to be like, ‘No they don’t, that’s expensive. Denied!’”
Sometimes, you simply can’t wait out the back-and-forth between your provider and the insurance company — or your insurance company gets stingy after an emergency has already occurred. Tu has a recommendation she says insurance companies don’t want you to know about.
Appeal, Appeal, Appeal
According to Tu, the biggest secret insurance companies would rather keep hidden is that you can appeal their decisions. She encouraged people to armor up against their insurance companies, suggesting an AI tool as a powerful resource in synthesizing information for a formal appeal.
The Patient Advocate Foundation also has tips worth following, such as understanding the nature of the denial — specifically, the “why” — and joining forces with your doctor to present a counter-narrative. You’ll need to gather relevant documents and submit them to the insurance company by the deadline.
The foundation also reiterated that many states offer assistance through their departments of insurance or ombudsman programs. You don’t have to accept their first verdict lying down — especially when your health is on the line.
How To Negotiate With Hospitals About Your Bills
Another way to handle medical debt involves going straight to the hospital or facility that provided your care. In some circumstances, you can negotiate directly with these providers or raise issues that could potentially cost you a lot down the line.
MoneyLion spoke with Andy Schoonover, founder and CEO of CrowdHealth, to learn more about these options.
1. Request an Itemized Bill
Schoonover said billing errors are “remarkably common,” so the first thing to do is request an itemized bill from the hospital.
“Studies have found error rates in hospital bills ranging from roughly 50% to 80%, including duplicate charges, services you never received, incorrect codes, and charges for canceled procedures,” he said.
2. If You Can Pay a Lump Sum, Ask for a Cash Discount
Despite what you may fear, Schoonover said hospital bills are negotiable. If you’re capable of paying a lump sum, he urged you to request a cash discount, adding that 50% — or sometimes more — can be common. You can also ask about other resources to alleviate your financial burden.
“Ask about financial assistance or charity care: Nonprofit hospitals are legally required to offer this,” Schoonover said. “Ask if they’ll match the Medicare rate or the rate they accept from major insurers.”
3. Know That a Payment Plan Might Not Fix Things the Way You Hope
While the phrase “payment plan” might make you feel like you’ve found a way to make paying easier, Schoonover cautioned that not all payment plans are created equal. Be careful that you’re not just getting a plan that merely spreads out your pain.
“If you can get a payment plan at a reduced rate, then that works great,” Schoonover said.
The Bottom Line
Medical debt is a frustrating part of everyday life for too many people. As Vivian Tu points out, it’s unfair — but there are ways to reduce your burden. Appealing your health insurance company’s denial is one place to start. You can also negotiate with a hospital or care provider.
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