What *not* to do when you get a big medical bill
Don’t pay it right away, but don’t ignore it either.
Hey there—
Been a while!1 We’re restarting First Aid Kit with a big topic, maybe the biggest we’ll cover: What to do when you get a big medical bill — or almost any medical bill.
If you don’t want to pay more than you should, then the to-do list can be super-long. It’ll take us at least a half-dozen installments to walk you through every option you have.
But when you first get that bill, you’ve got two important things to NOT do:
Don’t ignore it. Of course, ignoring something this scary can be a very natural response. For now, just know: Over the next bunch of months, I’m gonna give you some reasons to be brave, even optimistic.
Don’t pay it right away. Because it can’t hurt you yet. You’ve probably got some time — at least a year — before that bill or whoever sent it can do anything serious to you.
The last part is the good news, and it’s actually news: If you got a bill today, you’re in a much stronger position than you would have been if it had arrived last year, or even at the start of this one.
Here’s why: In March 2022, the companies that compile credit reports — TransUnion, Experian, and Equifax — announced that they would exclude medical bills from credit reports until those bills were at least a year old. And some, they would never add at all.
So you have time before whoever’s sent you this bill can likely do any lasting financial damage. But you may need every day of that window to prevent that damage.
You need time to chase down your options…and your people
There’s a lot to do to keep from paying more than you should. In later installments, we’ll get into the specifics: evaluating a bill to see if it’s even correct, asking about financial assistance, haggling with insurance, plus negotiating with providers and — if necessary — debt collectors.
All that work takes time, especially because you’re not the only one involved in the process. As you go along, you’ll need responses from other folks: whoever’s billing you, maybe your insurance company, maybe government agencies you call on for help enforcing your rights.
And you know none of those folks will necessarily respond quickly, no matter how hard you stay on them.
That’s why, to run down all your best options for not paying any more than you should, you may need that year.
And you also may want to use that year to save up some cash, if you can.
Because in the end, your best option may still involve paying a bunch of money — probably less than the original bill’s total, but maybe still a bunch — and all at once.
Sound like a lot? It is. Way more than you should have to take on.
We’re gonna load you up with tools for that fight. Meanwhile, don’t let a bill collector’s sense of urgency shake you up: You’re entitled to the time you’ll need to put those tools to work. You’ve got a year in most cases, and maybe more.
Why you could have *more* than a year
The credit bureaus started excluding less-than-a-year-old medical bills from credit reports in July 2022. And starting in March 2023, they’re going farther: All debts under $500 will completely disappear from credit reports.
Credit counselor Lara Ceccarelli called these changes “huge,” when we talked for An Arm and a Leg recently.
The situation's still terrible. There are still way too many of us exposed to super-high medical bills, with insurance that doesn't really protect us. As I said to Lara: We're still sitting ducks.
She didn’t completely disagree: “We're sitting ducks with maybe a small shield protecting us,” Lara said. “We're sitting ducks, but we've got some bushes shielding us now from the hunters.”
And these bushes — the fact that bills under $500 no longer show up on credit reports — they do make a difference:
To start with, they cover most of the medical bills in collections — more than 62 percent, according to a report from the federal Consumer Financial Protection Bureau.
What’s more, Lara said that for individual patients, bills under $500 can represent much bigger chunks of debt.
“I see scenarios routinely — I mean, several days a week,” she said, “where somebody has got five or six different medical bills, all under $500, from the same debt collector, all sitting on the credit report.”
And now those lower-dollar bills will come off credit reports. They can’t drag down your credit score, making it harder to get a home loan, a car loan, an apartment, or even a job.
But … you shouldn’t ignore them.
Beware the super-petty hospital
Honestly, you may not be able to ignore that bill, even if you try. Whoever is on the other side can still call you, bug you, and otherwise work on your nerves.
And worst-case: They could sue you to collect on it — and a judge could let them raid your paycheck or even your bank account. Lara says she rarely sees people getting sued for these smaller amounts, but rarely isn’t never.
Some hospitals may even file suits for low-dollar amounts routinely.
In 2021, the state of Maryland passed legislation to prevent hospitals from suing people who qualified for financial assistance. A big piece of ammo in the fight for that law was a research report from National Nurses United, which included this data point:
For one set of Maryland hospitals, half of their lawsuits were for less than $699. You can bet some of those bills were for less than $500.
So, yep: Some hospitals could sue you over not-very-much. And very-worst-case, they could do it in less than a year. So keep an eye on those bills, even if they aren’t super-high.
But the most important reason to pay attention to bills under $500 is: You may not have to pay them at all. It’s gonna take at least a little work, and there’s no guarantee, but it can definitely work.
You can fight back. And we’re going to show you how in a bunch of First Aid Kits over the next few months.
If you can’t wait that long, check out the ready-to-go resources below.
I’ll catch you soon. Till then, take care of yourself.
Dan
Bill-fighting crash course
In less than 3 minutes: @ChristyPRN is a former nurse who has great medical-bill tips and info on her TikTok. that are quick to access. She speeds through a lot of the strategies we’ll cover this short video.
In about 300 pages: Former ProPublica reporter Marshall Allen published a pretty-comprehensive bill-fighting guide in 2021, as a book. Some of the top advice in today’s newsletter echoes that book’s title: Never Pay the First Bill. (Marshall also has a newsletter with solid tips.)
In hilarious 60-second blasts: North Carolina mom Shaunna Burns went super-viral on TikTok with this 60-second video on dealing with medical bills. Another half-dozen on the same topic were deservedly popular.
On An Arm and a Leg: We talked with Marshall Allen when his book came out, profiled Shaunna Burns, and fact-checked some of Shaunna’s advice with attorney Jennifer Bosco of the National Consumer Law Center.
I had COVID, and it slowed me way down. In retrospect, one reason it hit me so hard was: I’d been over-working before, trying to run a marathon at the pace of a sprint. We’re picking back up now at a jogging pace, once a month.