At what point does a bill become debt?
I was wondering about this yesterday as I called on my outstanding medical bills from the birth of my third child in November 2007. The bills range from 45 days to 65 days late right now. Some of the medical companies have threatened to send my bills to collections, etc. It’s mostly just intimidation tactics, and I’ve ignored them until now.
I’m finally able to deal with the medical bills because now I’ve paid all my taxes, which was a huge burden. I’ll be completely done with them on February 8 when I file my personal return. (I have to do a corporate return and a personal return.) But taxes had to come first. I simply couldn’t even look at the medical bills until I paid my taxes.
So this week I spent a lot of time calling all the companies to let them know money was coming soon. I also asked each company if they had what’s called a reduced “self-pay” rate. My wife and kids have health insurance through Kaiser Permanente, but Kaiser no longer covers child birth. This meant we had to pay for the entire pregnancy and delivery out of pocket. So we did everything “self-pay.”
Anyhow, most medical companies offer an insured rate as their “standard” rate. The assumption is that everybody is insured. This insured rate is substantially higher than the self-pay rate, usually by 25% up to 33%.
As you might already know, we paid the doctor bill last May. It was ~$2,200. Then we paid the hospital bill in November. It was ~$3,500. These are the bills that remain:
As you can see, I’ve saved over $500 so far, just by calling each company to see what kind of terms they can offer me. Bill #4 is pending approval for the self-pay rate, so there will probably be another reduction there. Bill #5 didn’t offer a self-pay rate, but did offer low monthly payments without interest. So I paid $50 just as a stop-gap. I’ll probably pay the whole thing within a couple weeks.
Let me tell you, paying for a pregnancy and delivery out of pocket is not fun. You never know how much it will cost, when the bills will arrive, what the bills are even paying for, etc. It’s just the labyrinthine nightmare that is medical care in America circa 2008.
On a positive note, God has blessed my freelance copywriting business these last few weeks. I’m booked solid and can’t even think about taking on more projects until at least three weeks from now. So that’s a good thing. God is amazing. He’s always making sure I can pay my bills, even when it seems impossible.
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Excellent story! I had no idea that hospitals charge MORE if you have insurance. Craziness!
Hi Becky – Thank you for the compliment.
It makes sense. Insurance is the biggest middle man to ever exist in any industry.
Say you have a routine operation that might normally cost $1,000. You could just pay your doctor directly and be done with it. Or you could pay insurance $1,500, and they’ll pay the doctor his $1,000.
For insurance to survive, they must charge a premium. That’s just the way it works.
I personally think health insurance is one of the biggest nightmares to deal with. It should be only for catastrophic events. But Americans have demanded that health insurance pay for everything.
Why would they demand this?
Because they want something for nothing. Whenever they get sick or have the slightest medical issues, they don’t want to pay the bill… they want their neighbor to pay it for them.
Eventually, the system breaks down.
Think about it from a doctor’s perspective. If I pay him cash, the deal is done. But if he has to hire a team of secretaries to spend 8 hours a day on the phone filing insurance claims, then he HAS to charge more just to cover his costs.
Fortunately, this isn’t a health insurance blog, so you won’t have to listen to my rants about it anymore. ;-)
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