We wanted to take some time and focus on medical insurance in comparison to self pay patients because many people get their credit destroyed by medical bills. In later articles, we will also delve into medical insurance, co-pays and the seemingly endless number of bills that canÂ accumulate from one visit to the doctor. In that regard, it is very important to think of your doctor as a store front offering many products by many different manufactures just like your local supermarket.
But, back to the self pay patients. If we had to wrap it up in a word, we would simply say “negotiate”. Ironically, many people do negotiate with their doctors. However, there are more bills than just from your doctor. Again, your doctor is the store front. Your doctor sends your blood work to a laboratory. He gets medications from a pharmaceutical company. He refers you to specialist doctors, physical therapy and other medical products. All of these entities are separate businesses and they bill separately for their services. Anyone spent any time in the hospital or at the doctors office (even if it is just to have a baby) knows that the bills add up very quickly.
Now, what makes it manageable is medical insurance. The insurance companies have negotiated rates with theÂ businesses in the medical world. There are countless hours and competitive maneuvering behind the scenes where companies compete to be preferred with different insurance companies and in network with others. Medicine is big business. And, in that light, everyone wants a deal. So, insurance companies offer in network status and medical practices offer discounted services to that insurance company. The benefit being increase volume of patients (as patients will go to in network providers).
What happens to self pay patients? Well, by default, they will be billed at list price. DO NOT pay list price. Call the office, medical device company,Â or laboratory and negotiate a discounted rate. Unless you are very wealthy, the bill will likely be a hardship on you and you need to tell them that is the case. However, many people see the high bills, assume they cannot pay it and they just try to forget about it. Then, the medical companies send the bill to a collection agency and people get penalized on their credit scores. Usually, when things turn around, they try to get a line of credit and realize they have a bad credit score due to a forgotten medical bill. Unfortunately, once the bill is in collections, there is little that can be done to reduce the cost of the bill.
The conclusion is simple. If you want your credit to remain in tact, call up the company that provided the service. Talk to them. Let them know your situation. They may very well put you on a payment plan as well as reduce your rate. Just do not wait until the bill has gone to collections and there is a very good chance you can save a significant amount of money and your credit score.