How to: Payment Plans and Your Medical Bills

When you are feeling under the weather and have to go to the doctor or, in extreme situations, the hospital, it’s not always clear what the final bill will be when it’s all said and done.

Trust me, I understand. We’ve been blindsided more than once by a large medical bill we couldn’t afford to pay outright. And yet, with a little effort, we’ve found that creating a payment plan for those bills can take a little time, but save our budget going forward.

Payment Plans and Your Medical Bills

As with anything that really matters, there are a few things you can do to streamline the process.

Step 1: Gather Your Bills

This seems like a common-sense step, but it’s really important that you have ALL of the bills in front of you before you begin calling for payment plans. Otherwise, you’ll end up having to do the process over again.

For example, a hospital stay might result in bills from:

  • Ambulance
  • The Hospital
  • Doctors
  • Surgeons
  • Anesthesiologists
  • Labs
  • …and many others.

Once you have the bills in front of you, determine the total amount you owe to each provider. By doing this, you can decide if there are smaller pieces (like a lab bill under $20) that you can just pay off now, and not worry about going forward.

Step 2: Know How Much You Can Pay

Before you call the provider to ask for a payment plan, take a moment to reevaluate your monthly budget and determine a reasonable amount that you’d be able to pay toward that debt based on your income and current expenses. If you are on a limited income, you may need to decide if there is an extra expense you can let go of in order to make a payment. (Don’t have a budget? Find out how to set one up HERE.)

Note: Some providers have a minimum payment, so you may not get a complete choice in the matter, but if you know that you can’t pay more than, let’s say $100, without neglecting another critical expense, you may be able to negotiate that with the provider. If you don’t know your budget ahead of time, you won’t have anything to stand on!

Step 3: Start Lower Than You Think

Call each provider and ask to set up a payment plan. Let them know that you cannot afford to pay the entire bill up front, but that you are willing to pay a certain amount toward it each month. Don’t wait for them to ask you how much you can pay, go ahead and be clear about it right away.

When I’ve made my calls, I know that sometimes the agent on the other end will negotiate up just a little, so I always start with my suggested monthly payment a little lower than what I believe to be feasible within my budget. For example, if I know I can pay $100, I’ll ask for a $75 payment amount, knowing that they might work it up to my original $100.

Of course, the amount you are paying needs to be reasonable based on the debt that you owe. Most providers aren’t going to take a $25 per month payment on a $10,000 bill.

Step 4: Put That Payment on Auto Pay

Have a payment that works for you? Great! If at all possible, have the customer service representative set your payment plan up on auto pay. This means that you’ll provide a debit card or checking account information so that you don’t miss a single payment.

Trust me, once you miss a payment, that provider will be a lot less likely to work with you in the future and may actually ask you for the balance of your debt in full. Don’t put yourself it that situation if you don’t have to! Set up that payment plan on auto pay immediately.

Note: Don’t use a credit card as your payment method for auto pay. By doing so, you risk being charged interest and spending a lot more on the medical bill than was originally expected from you.

Plan for Next Time

The best thing you can do after getting that payment plan put in place is to prepare yourself for the next time because we all know there will be a next time. You can find my tips for doing just that HERE.

Have you had a successful experience setting up a payment plan for your medical bills? Leave me a comment below and let me know!

Tip: Sometimes our insurance choice is to blame for the big medical bills we receive. Check out my method for choosing an insurance plan that works for me and my family HERE