When Tina Ortega began feeling pain in her mouth, she went straight to a dentist. The Mississippi resident ultimately needed a root canal. Even with insurance, she had to cover $500 out of pocket.
She and her husband didn’t have the cash — Ortega was unemployed and had children, so money was tight. To settle the bill, she opened a CareCredit account and used its deferred-interest offer.
She was sure she could pay it off before interest kicked in, so at the time it seemed like the best solution.
“People who say don’t use credit cards — they don’t understand because they’ve never been in that situation,” she said. “Especially if they’ve never had to live without insurance. You do what you have to do.”
Medical Costs Cause Major Anxiety
In the HealthFirst Financial Patient Survey, conducted in 2017 by ORC International, 1,011 adults answered questions about health care pricing and payment alternatives.
The results? Forty-two percent of respondents said they “are very concerned or concerned about their ability to pay out-of-pocket medical bills in the next two years.” That share rose to 54% among those earning less than $35,000 annually.
They weren’t worried only about major operations. About 53% said they feared being unable to pay a medical bill under $1,000, and 35% were anxious about covering a bill under $500.
CareCredit, or any card with interest-free or deferred-interest promotions, can provide relief for patients who want some time to handle a large medical expense.
But with deferred interest, which is how CareCredit works, if you don’t clear the balance by the end of the promotional period, you’ll be billed for all the interest you avoided during that time, in addition to any interest on the remaining balance thereafter.
Ortega’s interest-free window lasted nine months — after that, she would face an annual percentage rate (APR) of 26.99%. Had she not paid the balance in full during the promo period, she would have been charged all the interest that had been deferred for those nine months.
Ruth Linden, founder and president of Tree of Life Health Advocates, advises that financing medical expenses on a credit card — including CareCredit — should be a last-ditch option.
Why? Because once the interest-free term ends, you’ll often face “steep interest rates.”
“The trouble is that many people fully intend to pay off their balance within the interest-free window but life (and other health issues) can get in the way,” Linden said.
3 Alternatives to Putting Medical Bills on a Credit Card
If Ortega hadn’t used credit to cover the cost, what options would have been available to her without the funds in her bank account?
Here are a few alternatives to charging medical bills to plastic:
- Ask a Provider for Financial Help
Whether the bill comes from a hospital, lab or doctor, requesting assistance can make a big difference.
“It can’t hurt, and it might make a huge difference,” Linden said. “Lower-income patients may qualify for financial aidfrom hospitals and individual providers.”
To begin, USA.gov recommends reaching out to your hospital’s patient services office. After you describe your circumstances, the office will ask questions about your income to see if you qualify for support. If you do, part of your bill could be forgiven.
If you don’t qualify for assistance, USA.gov notes you might be able to set up a payment arrangement with the hospital.
2. Haggle Over the Bill
If your income is too high to receive provider discounts, try negotiating your balance. You can negotiate with both the provider and your insurer.
Not sure how to begin? Start by contacting the provider’s billing department. Tell the billing representative you’re willing to pay a portion of the balance now if the provider will write off the remainder.
If that feels daunting, consider researching typical retail prices for hospital services. Those figures can serve as a benchmark in negotiations and may work in your favor if your bill is substantially above average.
3. Seek Help From a Patient or Medical Billing Advocate
Linden says a patient or medical billing advocate can examine your statements and the insurance company’s explanation of benefits — if you have coverage. The advocate looks for billing mistakes, like duplicate charges or fees for services you didn’t receive, and advocates to get those errors fixed.
If you don’t have a professional advocate, you can still hunt for mistakes yourself. It’s worth the time — estimates suggest around 80% of medical bills contain errors.
Examine your bill and verify every line item. If a prescription appears, did you actually receive it from the provider or pick it up from the pharmacy? Are any charges duplicated? If you spot mistakes, contact the provider’s billing office right away.
Meanwhile, consider building an emergency fund to cover future medical costs — you’ll appreciate it later.
