How I Recovered from Over $500,000 Worth of Medical Debt
A sudden diagnosis of heart failure in an otherwise healthy 28-year-old person is challenging to accept.
Spending the next months grappling with questions like “Will he be able to go back to work?” and “How will we make payments on our mortgage?” was difficult.
We were married just three years prior, had children, and were shocked to see a huge medical bill show up for the unexpected diagnosis of a chronic health condition.
Pulling together and working hard to make big decisions, we were able to pay off $500,000 worth of medical debt and put ourselves on the path to overcoming numerous additional financial difficulties along the way.
Here’s how we paid off that debt, plus our tips for reducing money stress if you find yourself in a similar situation.
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1. Recognize the debt isn’t all due within 30 days
We had insurance, which covered more than $700,000 worth of medical debt from my husband’s virus-induced heart failure. Yet we had this huge bill to pay for his hospital stay and numerous procedures.
On top of that, this was a chronic condition, one he continues to battle as he waits for a heart transplant (nearly 20 years later).
Our first realization was that we didn’t have to pay everything all at once (medical debt doesn’t show up on your credit report for 365 days). Instead, we could structure our debt for repayment that fits our lives.
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2. Verify the accuracy of your bills
One of the first things we did was review all of the charges. In the hospital, we signed plenty of forms providing consent and agreeing to pay for various medical procedures.
Within the details of these bills, we learned that numerous providers failed to bill insurance using the proper code. That caused the insurance company to claim the procedures were not approved.
Luckily, we caught this by reviewing the bills, pinpointing what happened, going back to the terms of those agreements, and verifying we could dispute the costs. This saved us several thousand dollars.
3. Talk to a social worker
As a new, young family where my husband was the sole bread winner and then suddenly out of work, we were terrified of what was to come.
We set up an appointment with an amazing social worker at the hospital who helped us navigate the costs and options available.
One of the first steps was to request a review of all of our costs. This forced the hospital to verify all costs, and in turn, we saw the overall bill drop by about 10% due to “errors” or “unverifiable charges.”
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4. Find out if you qualify for low-income savings
The large hospital my husband was working with had numerous tools in place to help those with lower incomes.
We applied for an income-driven hardship plan, which would reduce our monthly bill to under $100 until we could figure out what to do next.
That didn’t help us to pay down the debt but allowed us to get back to work and eliminate some money stress.
5. Build a budget
About six months after his health scare, he was back to work, and I was working as well. From the start, we created a steady budget and followed it very closely.
It meant plenty of sacrifices, including creating low-cost meals and working to reduce any extras like eating out or buying random toys we didn’t really need.
6. Negotiate when you can
It would have been easy to spend our sizable tax refund each year on something special or interesting, but instead, we used it to help us pay down our medical debt.
We then contacted the financial aid office at the hospital and negotiated with them to pay off some of the debt.
For example, in the first year, we received a $3,400 tax refund. We had one individual debt for a doctor that was $5,300. We got the provider to agree to pay in full with just the $3,400.
We did this for several years and saved around $27,000 this way.
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7. Improve insurance coverage
After this diagnosis, we recognized the need for better insurance, but my husband now has a pre-existing condition, which would make it super hard for him to get an affordable policy.
Thankfully, now that I was working, we could add him to my health insurance as secondary coverage, which nearly helped eliminate most of his ongoing medical and prescription costs.
I specifically took a job offering quality insurance because of how vital we knew it was.
8. Figure out COBRA
About 12 years into his diagnosis, my husband’s condition worsened, with his heart pumping at less than 16% (60% is considered normal).
This meant the next step in his journey: the placement of a left-ventricular assist device (LVAD). Unfortunately, he wouldn’t be able to go back to work.
Our social worker told us of a program the hospital offered in which they would pay his COBRA insurance payment each month for as long as he was eligible.
The hospital covered his COBRA payment monthly, which bought us time until he qualified for Medicare through disability.
9. Apply for low-cost supplies
This new condition required ongoing medical supplies, which we paid $250 per month out of pocket after insurance. We applied for financial assistance to get that cost significantly lower.
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10. Don’t pay interest on medical debt
Our hospital system, the Cleveland Clinic, was exceptional to us in providing care, and we knew he needed to stay there because of their history.
We were able to request help with his medical bills from the hospital from the start. We learned they would finance just about all of it without interest because we showed that his income is now nothing.
11. Rework the budget as circumstances change
Over the next few years, my husband’s condition stabilized, and we were able to really tackle debt. He couldn’t work, but we reworked our budget to focus solely on my income.
Once he started to receive disability payments, we applied that balance in full to his medical debt, negotiating with every single provider.
They knew we could easily file for bankruptcy, and their debt would be wiped out, so most were more than willing to work with us.
12. Get a side hustle
Because I was working, we didn’t qualify for Medicaid. However, recognizing our need to make extra money, I started to work a second job from home.
Initially, it was a phone position for a few nights a week. Then I helped watch children for several nurses who worked overnight shifts. Eventually, I made my way into building a business through freelance writing.
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13. Don’t use credit
Initially, we had some credit card debt, and that was the most difficult part of remaining within the budget because of the high-interest rates. We paid those off as a priority and lived a cash-based budget moving forward.
We were approached several times about home equity loans, debt consolidation and personal loans, and high-interest credit to pay off our medical debt. Don’t fall for this trap!
With our payment plan, we had no pressure to pay interest or make payments we couldn’t afford. And the clinic was not reporting this debt to the credit bureaus. Consolidating would have cost us much more.
14. Remain consistent in building savings
Over the last decade, our medical bills have risen and fallen numerous times, thanks in part to his ongoing care needs, numerous hospitalizations, trips to the ER, and his 17+ daily medications.
However, we have remained consistent in building up our emergency fund. It has helped to manage ups and downs in our budget or when I couldn’t work due to needing to be at the hospital.
15. Don’t ignore bills
As bills roll in, we verify them, document what they are, and then add them to the payment cycle.
We’ve paid off more than $500,000 of medical debt over his illness, but we recognize we will continue to have more coming in.
By staying on top of bills, it’s easier to verify that something isn’t accurate. We also work with our insurance company consistently to ensure he has coverage that aligns best with his care.
Bottom line
Medical debt is hard, but it doesn’t have to be the end of the world. It’s actually something that anyone can move past, even if it doesn’t initially feel like it.
We’ve found that most providers are more than willing to work with you, reduce charges, and be flexible as long as you continue to make some type of payment. There were several months when $10 was all that we could pay.
As my husband waits for a heart transplant now, we have a strong plan in place to cover the next onslaught of medical debt that’s likely to come.
But since we took the right steps, we’re doing better financially than we initially thought.
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