What Happens If You Don’t Pay Your Medical Bills?

If you don’t pay a medical bill that’s under $500.00, your credit will be just fine. If it’s over $500.00, your credit will be affected in the short term until the CFPB’s new rule of banning medical bills on credit reports goes into effect.

Of course, ignoring any kind of debt isn’t a good idea even if doesn’t affect your credit.

Here are several steps you can take if you can’t afford to pay your medical bills:

1. Verify if the charges are accurate.
2. If your health insurance denies your claim, you have the right to an internal appeal or an external review.
3. Check if you’re protected by the No Surprises Act (NSA).
4. Ask for a written copy of the hospital’s Financial Assistance Policy.

Verify if Your Medical Bills Are Accurate

Mistakes happen but mistakes on a medical bill are more costly than normal. Before finding ways to pay for your medical bills, make sure there aren’t any mistakes by doing the following:

• Verify the name, billing address, and insurance information on your bill. The chances are low that it’s a case of mistaken identity, but it can happen.
• Ask for a plain language explanation for the items on the bill. This way, you can ensure that you’re only getting billed for the services that you received.
• Check for any items that are listed as “out-of-network” services. Verify if these were truly done out-of-network.” And if they were, you can check if you’re protected by the No Surprises Act.

Related article: What is the Minimum Monthly Payment on Medical Bills?

What is the No Surprises Act? 

The No Surprises Act protects you from out-of-network charges from Emergency Services (except for ground ambulance services) and when you get care from an In-network Hospital, Hospital Outpatient Department, and Ambulatory Surgical Center.

The No Surprise Act applies to health insurance plans from:

1. Employers (including the Federal Employees Health Benefits plan)
2. The Federal Health Insurance Marketplace
3. The State-based Marketplace
4. Other Individual Market Coverage

💡 Note: Make sure that you didn’t waive your protection from the No Surprises Act by signing a notice and consent form.

How to Apply for a Financial Assistance Policy?

Under the Affordable Care Act, all hospitals are required to have a widely publicized Financial Assistance Policy (FAP). Here is a rough guideline on how to proceed when applying for your hospitals FAP:

1. The hospital is required to offer you a paper copy of the summary of their Financial Assistance Policy. Don’t hesitate to ask for this copy if it isn’t offered to you.
2. Find out if you’re eligible for their policy.
3. If you’re eligible, find the summary of how to apply in your paper copy.
4. Take note of the website URL or physical location in which you can obtain copies of their FAP application form.
5. Fill out the FAP application form which will most likely require the following information:
   • Income
   • Previous Year’s Tax Form
   • Current Pay Stub
   • Basic Expenses (rent, mortgage, utilities, credit card statements)
6. Ask how long it will take to process your financial assistance application.
7. Inquire what happens to your bill during the processing time.
8. If you’ve been sent to collections, you can request debt collectors to pause their collection activity while your application is processed.

💡 Note: Some states provide Consumer Assistance Programs (CAP) that can further help ease the burden of your medical debt. Find out if your state offers a CAP that you’re eligible for on this page:  https://www.cms.gov/CCIIO/Resources/Consumer-Assistance-Grants