Dear Liz: I'm 26 and got married in August. For our honeymoon, we went to my hometown. We went for a hike through the hills and I got bitten by a rattlesnake.
After I spent the night in a hospital, we got a bill for just under $20,000. I don't have health insurance (big mistake, I know). Because our combined income is more than $24,000, we were told we were not eligible for any discount. The woman I spoke with about the bill told me my options were to pay off the bill at $550 a month for the next three years, which is more than we pay for rent; pay the bill in full and get a 10% discount, which I do not have the money for; or file for bankruptcy.
We're going to look at getting me on my wife's insurance plan and see if we might be able to get them to retroactively cover some of the cost, but that doesn't seem too likely even though the incident happened less than a week after we got married. What is the best course of action?
Answer: Don't hold your breath about getting covered retroactively — that's not going to happen. But get added to your wife's insurance as soon as possible anyway. As you've seen, even the healthiest person is just one accident or illness away from potentially catastrophic bills, and having insurance will help you the next time.
Call the hospital and ask to speak directly to a financial counselor. Most hospitals have them, and they can help you review your situation to see if you might indeed qualify for discounts. Many hospitals offer some kind of financial aid or charitable program for people with incomes higher than yours.
Even if you don't qualify for a charitable discount, you still might be able to reduce the bill if you can persuade the hospital to charge you what it would have charged an insurer for the same stay. Insurers negotiate significant discounts with providers, and you could end up paying quite a bit less if the hospital gives you the same discount.
If you can get the total bill reduced, you may be able to work out a payment plan with the hospital that you can afford. Whatever you do, try to avoid taking out a loan or using credit cards to cover this bill. A payment plan with the hospital typically won't carry any interest, while the rates you would pay to a lender would probably be sky-high.
If the hospital won't cooperate and you can't pay the bill, bankruptcy might be the best of bad options. Otherwise the debt probably would be turned over to collection agencies that could hound you for years.
For more tips and strategies on how to negotiate your debt, pick up "The Medical Bill Survival Guide" by Nicholas Newsad.
This mistake may boost credit score
Dear Liz: I am 43, own my home free and clear and have a credit score of 794. On one of my credit reports, there are two credit card accounts and five installment accounts that I know have been closed but are still listed as open. Should I inform the bureau that these accounts have been closed?
Answer: There's really no reason for you to enlighten the credit bureau. These open accounts may be contributing to your credit score with that bureau, and closing them could risk reducing your score.
By the way, you don't have just one credit score. You have many. The leading credit scoring formula is the FICO, and you have FICO scores at each of the three major credit bureaus. The bureaus also sell alternatives to the FICO score, including the VantageScore and their own in-house "consumer education scores." A 794 is a high score on the FICO scale but only middling on the VantageScore scale.
If you really want to know where you stand with lenders, check your FICO scores and review your credit reports at all three credit bureaus.
Liz Weston is the author of the upcoming book "The 10 Commandments of Money: Survive and Thrive in the New Economy." Questions for possible inclusion in her column may be sent to 3940 Laurel Canyon, No. 238, Studio City, CA 91604 or via the "Contact Liz" form at asklizweston.com. Distributed by No More Red Inc.