‘Happy Money’ Episode 5: The Secret to Slashing Your Medical Debt to Pennies — ‘You Have More Power Than You Realize’
Don't let debt collectors bully you. Expert guest Allison Sesso of Undue Medical Debt will have you negotiating bills like a pro
If you’re carrying medical debt, you’re not alone—and you have more power than you realize. There are billions of dollars in medical debt right now, affecting millions of women just like you. But here’s the hopeful truth: You can negotiate those bills, find relief and take back control of your financial future.
In Episode 5 of Woman’s World’s new Happy Money video series, all about finances in midlife, hosted by Digital Director Julia Dennison, Allison Sesso, president and CEO of Undue Medical Debt, shares what to know about unpaid medical debt and how to outsmart the system.
Watch Happy Money Episode 5 here or listen on Spotify, Amazon Music and Apple Podcasts.
Tune into Episode 5 right here! ‘How to Eliminate Medical Debt’ with Allison Sesso
The reality of medical debt
Statistics show that there is more than $220 billion in medical debt right now, and the problem is likely to continue. Part of what’s allowing this alarmingly high number to persist is the way the debt is handled.
“I don’t think people realize that medical debt is bought and sold on a market like a commodity, which is where you can buy medical debt for pennies on the dollar,” shares Sesso. “Hospitals, not all of them, but a percentage of them, do sell their written-off debts to for-profit debt buyers who then own those debts and can freely go to those individuals and try to collect.”
This means that these buyers will purchase $10,000 worth of debt for just $100—but they’ll still try to collect that full amount from you. Sadly, this issue is becoming more and more prevalent throughout the country.
“Recognize that this is a common problem—you are not alone,” she assures. “If you have medical debt, you should not feel ashamed.” The good news: It is possible to find some relief. Keep reading to find out your action plan.
How to reduce medical debt
Receiving a large bill after a medical procedure can certainly leave you feeling defenseless. But Sesso has empowering news: Advocating for yourself is not just possible—it’s recommended.
“I do think you do have more power than you realize, and you can negotiate those bills,” she says. Even if you feel uncomfortable approaching that process on your own, you can ask a friend, family member or patient advocate to help you make the call.
“Start by negotiating directly with the hospital before it even gets to some of these debt collectors,” advises Sesso. “What I would also say is take your time. Do not feel rushed to have to settle a bill right away.”
You may think you need to hustle to pay a bill before it ends up on your credit report, but the issue is not nearly as urgent as it seems. The reality: Wait at least a year before dealing with the matter. The process of settling a bill can be quite long, thanks to a lot of back and forth between the hospital or health care provider and the insurance company.
Here’s why this works in your favor: This slow process creates a window for you to work directly with your insurance company and challenge any denials.
“If you have an insurance company and you’re insured, you should be calling them and finding out, did they deny the care?” says Sesso. “Why didn’t they pay the full bill? Why is this amount falling on you?”
Once you’ve checked with your insurance company, you’re ready to negotiate directly with the hospital or provider.
How to negotiate medical bills effectively
Negotiating is key to finding financial relief, and there are several ways to go about this. An often overlooked step: asking for an itemized bill.
“What that does is it forces the entity that’s giving you the bill to take a fresh look at what they billed you for—sometimes they find errors,” explains Sesso.
Another way to lower medical debt? Offer cash—even if it’s just a fraction of the bill.
“If you have cash and you can pay immediately, your ability to negotiate for a lower cost [improves], because they’ll take cash today, preferred over putting you in a payment plan,” she says. “So if you have that cash available, you can probably negotiate for a lower overall amount to pay.”
Don’t do this when you’re paying off medical debt
While cash is an ideal way to begin paying off a medical bill, there’s one method you should stay clear of completely: credit cards.
“There are protections that are specifically in place for medical debt, for example, lower interest rates, protections around whether or not they can put it on your credit,” explains Sesso. “Once you put it on a credit card, it’s no longer medical debt, and those protections disappear.”
The only time it makes sense to do so? If you can pay off that debt the very next month, she adds. Otherwise, keep medical debt as medical debt to maintain important protections.
How to reduce future healthcare costs and debt
It’s no secret that healthcare is expensive—even if you have insurance. Though it’s impossible to plan for a large medical bill, there are steps you can take to help reduce any future debt you may acquire.
The first? “Understand in your community where you can go to get discounted or free care,” suggests Sesso. “Look at which hospitals have a financial assistance policy that would apply to you, that would give you a discount.”
Though these more affordable options often come with wait lists, crowds and lines, they can be a wise choice for screenings and other similar visits. Telehealth is another alternative that is often cheaper than more traditional appointments, but can still get you answers and prescriptions fast without breaking the bank.
Also smart: Put money aside (to the best of your ability) so that you can pay cash right away in the event of a sudden medical situation. As mentioned above, cash gives you extra negotiating power and can even lower your overall bill.
Remember, you’re not alone in this journey—millions of women are navigating medical debt right alongside you. But know this: You now have the knowledge and tools to advocate for yourself and negotiate with confidence.
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