How to Protect Yourself From Medical Debt, Because Our Health-Care System Doesn’t

When Sam Bendall broke his leg in a motorcycle accident last fall, he didn’t expect his medical care would cost more than $86,000. When James Jarrett got a mysterious bill after an emergency room visit for a dog bite, he didn’t think it would take months to untangle—and that he would still have to pay a portion of it. And when Caitlin Donovan had her third child, she never expected to spend eight months trying to get $250 back.

And Donovan’s problems weren’t limited to a $250 overbilling; she found numerous errors on her medical bills. Fortunately, she is the senior director of public relations at the National Patient Advocacy Foundation, a non-profit group based in Washington, D.C., that advocates for patient financial protections and access to affordable, quality healthcare. “It takes our pros, who handle very complicated cases, on average, 22 calls to resolve a case,” Donovan says. “We always estimate that half the medical bills out there have mistakes in them.”

And these mistakes can be costly. According to Debt.org, the average American spends more than $10,000 per year on healthcare, yet a recent Federal Reservereport showed that nearly 40 percent of U.S. adults would have trouble paying an unexpected $400 bill. That’s one reason why more than 137 million Americans end up with medical debt, which often requires them to remove money from their 401(k)s or take out home loans. In fact, a separate study estimated that more than 66 percent of bankruptcies are connected to medical issues, whether they are due to medical costs or time away from work.

“High bills, especially those that end in collections, can change a patient’s ability to get a job, qualify for a mortgage, pay their mortgage, or even get future medical care. It is crucial that patients know that they have rights and options if a catastrophic bill arrives for them,” Donovan says. Below, she weighs in on three examples of how a medical issue could lead you to lose money—and how you can decrease the chance of going into debt.

A Motorcycle Accident with Unaffordable Out-of-Pocket Costs

Sam Bendall, 35, is a seasoned on- and off-road motorcyclist from Southern California. He works as a freelance photographer and has a full-time job that provides medical insurance for him and his wife. Last November, he went to a motorcycle rally with some friends near Julian, California. The area is remote and full of off-road motorcycle trails. As Bendall tells it: “I was on a midsize adventure motorcycle that weighs around 450 pounds, and I just ran out of talent.”

Bendall trained as an EMT before his current full-time job, and when the bike fell on his right leg that day, he says he knew it was broken almost immediately. When the first responders arrived, they tried to get him to take an air ambulance—often referred to as a Life Flight—but Bendall refused because he didn’t need it. “I told them I knew what the rules of consent were and I didn’t need, nor want, the Life Flight, even if it was a painful two-hour ride to the hospital. I didn’t want a $50,000 flight bill.”

The paramedics arrived and transported him to a trauma facility roughly two hours away and Bendall had X-rays done. The doctors confirmed he had a spiral fracture of his right tibia, a common break for motorcycle accidents, and one that required surgery to install a titanium rod and reattach Bendall’s fibula. Two days later, he was headed home on crutches with instructions for rehab.

Then he got the bills. “This is the first time I have had to deal with anything in the medical world, and it’s astounding … they overbill everything,” he says. “And I have good insurance!” So far, he says his insurance has been billed more than $86,000 for his care. “They want me to pay around $7,100. We simply can’t afford that.”

“They want me to pay around $7,100. We simply can’t afford that.”

In situations like this, Donovan recommends a number of actions that consumers can take. “Use your EOB, or Explanation of Benefits, paperwork like a weapon on your own behalf. Don’t pay anything until you get it, and compare it to what actually happened while you were at the facility versus what you were billed for. Make sure that what happened matches what comes in the mail,” she says.

She also points out that many states have laws that prevent what is known as “surprise billing,” a practice where a provider bills a patient for the balance left over after they are paid by the insurance company. (There are currently 25 states that have laws that protect consumers against this practice.)

Finally, in cases like this where paying such a large amount would be a financial struggle, Donovan recommends negotiating directly with the hospital or medical-care facility you visited after the insurance has paid its portion of the bill. “For instance, you can ask if they will accept the Medicare rate, or use a site like healthcarebluebook.com to figure out costs,” and request those rates.

And don’t be afraid to ask for financial assistance. “Many hospitals have financial assistance programs, but often they won’t tell you unless you ask. You can also ask to set up a payment schedule,” she says. “Hospitals want to get paid, so if you’re willing to pay them, they will work with you.” And if you don’t qualify for the hospital’s financial assistance program, ask them to refer you to an outside program. “There are many programs that are set up specifically to help patients in financial difficulties.”

A Dog Bite with a Mysterious Bill

James Jarrett is a freelance writer in the medical and nursing field. Back in May of last year, he suffered a laceration to his finger after breaking up a dog fight between his dog and another. He went to the emergency room for treatment, even though he didn’t have insurance coverage. “The standard of care in animal-bite cases is to get the series of rabies shots, but I was extremely confident that there was no real risk of rabies in this case and, perhaps more importantly, I was uninsured. I refused the shots, as well as any medication,” Jarrett says.

Because of his work, Jarrett was well aware of how over-billing happens, so he was very careful about what care he accepted and what he rejected while at the ER. “I have some understanding of how some of this stuff works, and the ridiculous amount of power medical organizations can hold over patients by way of creating completely arbitrary prices and placing a burden on the patient to affirm the accuracy of their bill,” he says.

Jarrett says after his visit, he received three different bills: one from the radiographer who took X-rays of his finger, one from the hospital, and one mysterious bill from an emergency physicians group. The total of all three was around $3,500. “The last bill was the most confusing because it included a charge of about $1,800 from a doctor who I had never seen,” he says. He is sure of this because the person who oversaw his care was a nurse practitioner.

Months later, when Jarrett tried to get a breakdown of the mysterious costs and contest the fee for the doctor he never saw, he was given the runaround. Calls and emails went unanswered and he was repeatedly given the wrong contact information. He ultimately turned to the Patient Advocate Foundation, which told him to push for an itemized bill. He did, but the medical facility repeatedly refused to send him one. He says that after about three months of trying, he ended up negotiating to pay $500 with a $45 per month installment plan.

“Keep in mind, this was months after the visit, and the entire time I was also checking my credit score to confirm I hadn’t been hit with a collection,” Jarrett says. “So, after dealing with that massive headache, and eventually getting the bill reduced, I decided to just roll with it.”

Donovan says Jarrett was right to ask for an itemized bill. “Often bills will just have a general dollar amount on them, and you’d have to ask to get an itemized bill. Definitely ask. You can’t review the bill if you don’t have all the information,” she says. And reviewing the fees is important. “About half of all medical bills have errors in them, which could result in a lowered bill when adjusted. Check to make sure that they’re not billing you for services you didn’t have, drugs you didn’t take, or facilities you did not use.”

An Ultrasound With An Unnecessary Charge

Even Donovan, who is well-versed in managing medical bills thanks to her job at the National Patient Advocacy Foundation, has paid erroneous bills and faced her own problems with medical costs. In January of 2019, when she was pregnant with her third child, she decided to track all the associated costs on a spreadsheet.

“I used hospital-affiliated midwives because you can use midwives for an uncomplicated birth, and it lowers your costs. Between the second and third trimester of my pregnancy though, the practice was bought by the local hospital chain,” Donovan says. “They wanted me to get an ultrasound, and I went to the ultrasound at their brand new hospital facility.”

Though Donovan had already had two healthy births, the doctor who looked at her ultrasound insisted that she needed to come in for ultrasounds at monthly intervals. She said she knew that she didn’t need them, and spoke to her primary care doctor before going to the additional appointments. “It was a prime example of high-cost low-value care,” she says. “And my doctor confirmed that there was no reason for [extra ultrasounds].” As a result, she canceled the appointments.

A few weeks later, she got a bill for $250, and she says the hospital billed her insurance $1,100 for the first ultrasound—which seemed like a very high rate. So, Donovan called her insurance to confirm that she should pay. Her insurance (erroneously) told her she should, and she sent the check that day. Two weeks later, she got another bill: $287 for the physician. “The insurer was not paying attention and gave me bad advice. I shouldn’t even have paid the $250 on the first bill,” she says.

It ended up taking eight months, more than 17 calls—including multiple conference calls with the medical facility and her insurance company—and the threat of legal action for Donovan to get her $250 back. But, she explains, “I am someone who is in the top 1 percent of knowing how to deal with these things.” Most people would never have known they paid a bill they weren’t responsible for.

In fact, errors on medical bills routinely cost patients lots of money. While Donovan eventually gave up on tracking the costs on her spreadsheet, she found that about half of the bills she got over the duration of her pregnancy were incorrect. She says that by catching the errors, she saved more than $650.

She found that about half of the bills she got over the duration of her pregnancy were incorrect. She says that by catching the errors, she saved more than $650.

That’s why she suggests that you stay diligent and do your best to keep track of your costs as you move through a medical process. While most medical billing errors and problems are not nefarious or intentional, they can still cause major financial problems for patients. “Every year, medical billing gets more complex, procedures get added, and each billing code can be modified a bunch of times, so it leaves open the chance for error. I don’t think that there are many people out there trying to charge people more,” Donovan said. “Most of the time the medical billing gets messed up because it’s complicated.”

Ultimately, though, the best offense against medical debt is a good defense: When you’re selecting insurance, choose the right plan for your needs, before you even set foot in a medical office. Make sure you know which physicians are in your insurance’s network. “You will have the lowest out-of-pocket rate if you do not stray to an out-of-network provider,” says Donovan, who also recommends seeing your primary care physician before seeking out specialists. “She may be able to help, and your costs will be lower than a visit to a specialist.”

It’s also important to know your rights, and learn the difference between deductibles, premiums, and out-of-pocket costs. Review your bills, and when you see something wrong, speak up and stick to your guns. “So many times the issues aren’t necessarily the insurance plan, it’s that there are so many mistakes and errors, and it’s such a huge time suck and so difficult to get these things sorted out,” she says.

Finally, if you need help, ask for it. There are for-profit and nonprofit organizations that offer assistance in negotiating and managing medical bills. While the for-profit organizations tend to be pricey, charging up to $200 per hour for their services, there are non-profit organizations like the National Patient Advocacy Foundation and others that can help negotiate bills, straighten out billing issues, and provide support. You may not be able to prevent an injury or an illness, but you usually have some control over how much medical care ultimately costs you—and doing everything you can to lower your expenses is the first step to preventing debt.