Where do you turn for help paying medical bills that you cannot afford?
No single private company, charitable organization, or government agency has the complete answer.
However, you can find a wide variety of programs that offer some financial assistance for qualifying patients with specific needs or certain illnesses.
Every penny counts when you are struggling to pay your doctor or hospital for life-saving treatment. Therefore, it makes sense to look under every rock, and consider every possible resource – no matter how small.
Private Companies Helping with Medical Debt
Private companies can often offer financial assistance to the widest range of patients struggling with medical debt. The family pays the company a fee. In turn, the company provides a service that promises to reduce what you owe to dentists, doctors, and hospitals.
Do your homework and choose a company that fits your situation.
Medical Billing Advocates
Private medical billing advocate companies can help patients and families struggling with overwhelming paperwork. Health insurance claims (explanation of benefits) often do not match what hospitals and doctors charge. Coding errors and duplicate entries are common.
- Two offices (hospital vs insurance) begin pointing fingers at each other
- Out-of-network balance billing charges are off the charts
Expert advocates can organize and manage this process on your behalf. This option makes the most sense when insurance claims wind up in purgatory.
Debt Relief Companies
Private debt relief companies work with people who owe more than $10,000 in unsecured obligations (credit cards, personal loans, unpaid medical bills). You begin by consolidating all of your payments into an escrow fund in order to build a balance over time.
- Debt settlement companies negotiate with hospitals, doctors, and collection agencies in an attempt to reach a settlement. They promise immediate partial payment (from your escrow account). If accepted, the creditor agrees to clear the debt and drop any lawsuits in exchange for a percentage of the amount owed. This saves you money in the end.
- Debt consolidation loan companies lend money that you must repay with interest using monthly installments. This option preserves your credit score and ability to borrow money for a home or car.
Private Crowdfunding websites are another place that people can turn for help with medical bills. Your network of friends, relatives, co-workers, neighbors, classmates, and church members may respond to an online appeal for financial assistance with your health issue.
Several online sites specialize in setting up and promoting a crowdfunding campaign and making it go viral. In exchange, they may take a small percentage of the money raised or charge an upfront fee.
Government Programs Helping with Medical Bills
Both federal and state government agencies provide different kinds of help paying medical bills. These needs-based programs help people who need to go to a doctor or hospital but have no insurance or money.
Several agencies administer programs that offer indirect forms of financial assistance. Take advantage of every benefit you can find.
Medicaid is a government entitlement program helping low-income families and children with healthcare needs. The Centers for Medicare & Medicaid Services along with individual state agencies administer this benefit. Your state agency determines income eligibility and the coverage for specific services.
Apply for Medicaid at your local county office. Medicaid may pay for medical expenses three months retroactively if you were previously uninsured. Visit the Benefits.gov website for links to local offices and other resources.
Three government programs offer help paying medical bills after insurance processes the claim. Health insurance claims often leave left-over expenses, which fall into one of two categories.
- In-network deductible, copayment, and coinsurance cost sharing elements
- Out-of-network balance billing from non-participating providers
State-specific balance billing laws prohibit out-of-network providers from charging above the “allowed amount.” The allowed amount is a preset (wholesale) figure often much lower than the (retail) providers charges. These laws protect patients from surprise balance bills after insurance pays for out-of-network care arising from two common scenarios.
- Emergency treatment with no time to research networks
- Out-of-network providers working at in-network hospitals
Government subsidy programs make health insurance more affordable. Health insurance is the most cost-effective way to pay medical bills when somebody is very sick. Families that earn too much money to qualify for Medicaid but earn less than 400% of the federal poverty level can take advantage.
Visit the Healthcare.gov website to sign up during the annual open enrollment period or any time of year if you have a qualifying life event. You may qualify for one of two possible income-based subsidies.
- Premium subsidies that lower the cost of coverage
- Cost-sharing subsidies reduce out-of-pocket costs for care
The cost-sharing subsidies help reduce patient exposure to medical bills after insurance pay for in-network care.
The Internal Revenue Service (IRS) administers two government programs that can lower the after-tax cost of your out-of-pocket medical expenses in any year. You can save money with two vehicles regardless of the network affiliation of the provider.
- Take itemized deductions on Schedule A for amounts exceeding a threshold
- 5% of Adjusted Gross Income 2018
- 10% of Adjusted Gross Income 2019
- Use a Flexible Spending Account for first dollar tax savings
- $2,700 individual contribution limit 2018
- $5,000 married couple limit
Certain kinds of medical expenses are tax deductible per IRS Publication 502.
- Health Insurance premiums not:
- Employer paid
- Funded through pretax payroll deductions
- Subject to a premium tax credit
- Long-Term Care Insurance premiums subject to limits
- Transportation and lodging to receive care
- Unreimbursed dental care expenses
The federal government does not award grants to individuals to help with medical expenses. Instead, the government awards grants to universities, state agencies, and non-profit organizations to fund ideas and projects to foster a public service or stimulate the economy.
Grants are free money that you do not have to pay back like a loan. Therefore, it may be worth the effort to start at the Grants.gov website and trace where the money flows. Apply for the medical grant with the agency or organization addressing your specific need or local area.
Social Security Disability Income (SSDI) is another important government benefit program. It is difficult to cover everyday living expenses when you are physically unable to work – let alone additional medical bills. To qualify for SSDI you must:
- Be unable to work because you have a medical condition that is expected to last at least one year or result in death.
- Not have a partial or short-term disability
- Meet SSA’s definition of a disability
- Be younger than your full retirement age
The listing on qualifying impairments for adults provides the criteria for a range of conditions. For example, SSI considers several factors for cancer patients with malignant neoplastic diseases.
- Origin of the cancer
- Extent of involvement
- Duration, frequency, and response to anticancer therapy
- Effects of any post-therapeutic residuals
State government programs sometimes provide benefits that help families struggling with medical expenses. As before, the financial assistance comes indirectly. Every little bit matters when health becomes a problem.
- Five states offer temporary disability coverage: CA, HI, NJ, NY, and RI
- Four states have paid leave benefits for caregivers: CA, NJ, NY, and RI
- The statute of limitation laws time bar lawsuits on medical debt
- Unemployment compensation covers people who quit work for health reasons
- Own disability: fewer states
- Sick family member: more states
- Must be able and available to work
- Workers Compensation covers occupational accidents and illnesses in 50 states
The Emergency Medical Treatment & Labor Act (EMTALA) ensures public access to emergency services regardless of ability to pay. Medicare-participating hospitals must provide a screening exam and stabilizing treatment for emergencies – including active labor.
Stabilizing means that the condition will not worsen upon discharge.
Many states enact charity care (uncompensated care) requirements for patients who are uninsured, underinsured, or ineligible for other government programs such as Medicaid. Under this program, people who meet income and asset requirements can receive financial aid to cover medically necessary services in acute care inpatient and outpatient facilities.
Each state has unique charity care rules and regulations.
Help Paying for Prescription Medications
People can find many avenues for help paying for their prescription medications. Once again, no silver bullet will eliminate all your drug costs. However, every penny counts when you must fund treatment for chronic conditions.
Prescription Drug Assistance Programs
Prescription drug assistance programs can help lower costs for patients. Pharmaceutical companies that manufacture the drugs offer two types of programs to qualifying individuals (low-income or without insurance plans).
Several non-profit organizations provide information that is more complete. Use these resource finders to identify the programs that fit your needs best.
Patient Assistance Programs support low-income families with free or low-cost brand-name prescription drugs for people without insurance. Each company determines which brands to include and other qualifying criteria.
The manufacturers are not being charitable. They are betting that most uninsured people with chronic conditions will eventually obtain insurance coverage, and their revenue stream will then grow.
Copay Assistance Programs help lower the out-of-pocket expenses for prescription drugs after insurance pays. Health insurance plans often feature a formulary tier system with progressively higher copay amounts.
- Tier 1: generic equivalents
- Tier 2: medium cost drugs
- Tier 3: higher cost brand names
- Tier 4: highest cost specialty drugs
Once again, the manufacturers are not being charitable. They fund a relatively small copayment (on tier 3 or 4 drugs) so that the patient can afford to take their expensive product. In return, the insurance company pays them a relatively large amount for use of the medication.
Medicare Part D
Medicare Part D can help senior citizens over the age of 65 and qualified people with a disability to lower their prescription drug costs. Part D is optional coverage that supplements Part A (Hospital Insurance) and Part B (Medical Insurance).
Each Medicare drug plan must have a standard level of coverage. However, each formulary can have a different set of covered drugs, and assign brands into different tiers. Pick the plan that covers your most expensive medications in the lowest tiers.
Pharmacy comparison sites can point you to the cheapest place to get prescriptions filled without insurance. These websites and mobile apps make it easy to compare prices and download applicable coupons that save you money.
Prescription drug discount plans promote big savings for patients without insurance. Many websites on the internet claim up to 80% off retail prices on expensive medications – with a free card.
How could this be true? Retail pharmacies want you to walk past aisles of high-margin merchandise to pick up your prescription. Just beware that the company may market your personal information and/or charge transaction fees.
Charitable Organizations Helping With Medical Bills
Some charitable organizations can help you pay your medical bills or other related expenses. These non-profit corporations rely on the generosity of donors. Therefore, their ability to offer resources often falls short of the overwhelming need.
Travel and Lodging
Medical travel and lodging expenses are frequently the responsibility of the family after insurance pays the hospitals and doctors. Most healthcare plans do not cover when the patient must drive or fly to a distant city and stay in a hotel for days, weeks, or months.
However, many charitable organizations, foundations and their associations step in to provide financial assistance with these out-of-pocket travel and lodging expenses.
- Healthcare Hospitality Network is a nationwide association of non-profits that provide lodging and support services for patients seeking treatment
- National Association of Hospital Hospitality Houses supports homes that help and heal to be more effective in their service to patients and families
- Ronald McDonald House Keeps families with sick children together and near the care and resources they need
- Joe’s House helps cancer patients and their families find a place to stay when traveling away from home for medical treatment
RIP Medical Debt
RIP Medical Debt locates, buys and forgives medical debt on behalf of individual donors, philanthropists, and organizations who step up to provide financial relief for people burdened by unpaid and unpayable medical bills.
John Oliver from Last Week Tonight brought attention to the work that RIP Medical Debt does. However, they purchase portfolios of debt from collection agencies. Therefore, they cannot target help for specific individuals. You can sign up for a registry so they can notify you if your name appears in a pool of debt they purchase.
Modest Needs is a non-profit organization provides short-term financial assistance to individuals and families in temporary crisis who work and live just above the poverty level. They give preference to those who give back to the community such as public school teachers, first responders, veterans returning from service abroad and active duty military members.
The Modest Needs self-sufficiency grant targets two types of needs.
- Emergency expenses including the cost of medical care not covered by insurance
- Regular monthly bills incurred by a family caretaker taking unpaid leave from work
You may find it difficult to find local churches with the resources to help pay your medical bills. Churches rely on tithing from attending members and often find that community needs outsize their giving levels.
However, many churches run food banks where volunteers collect leftovers from local bakeries, restaurants, and grocery stores. Accept the free food offering to make your budget stretch further while you recover.