Invest in You: Ready. Set. Grow.

Yes, you can negotiate your medical bills. Here's how to lower your costs

VIDEO2:4802:48
How to negotiate lower prices on your unpaid medical bills

When Shannon Harness went to the hospital with abdominal pain, he had no idea he'd ultimately wind up with bills totaling about $85,000.

The 39-year-old Marine Corps veteran, who works for a professional trail building company in Salida, Colorado, ultimately needed an appendectomy. A week later, he had a second surgery for a hematoma. Harness said his surgeon believed it was a rare complication that occurred as a result of his first surgery.

He didn't have health insurance. When the bill arrived from the hospital, it totaled $80,232. That doesn't include payments to various doctors that added about $5,000 to the cost.

"My first reaction was, 'How the hell am I going to pay this?'" Harness said.

Shannon Harness and his fiancée, Eliza Novick-Smith, are still paying off Harness' 2019 surgery.
Source: Shannon Harness

Harness and his fiancee, Eliza Novick-Smith, spoke with the financial assistance department of the nonprofit hospital, Heart of the Rockies Regional Medical Center. However, it turned out that Harness' last two paystubs included overtime, and he just missed qualifying for aid, the couple said.

"The conversation with the financial aid person left us feeling that there wasn't any negotiating we could do," Novick-Smith, 28, said.

Heart of the Rockies Regional Medical Center did not respond to a request for comment.

His situation is not unique. Prior to the pandemic, in 2019, more than 29 million people in the U.S. lacked health insurance, according to the U.S. Census Bureau. Even though coverage is available through Affordable Care Act marketplaces, 45% say high cost is the main reason they don't buy it, the Kaiser Family Foundation found.

"People should never go uninsured," said certified financial planner Carolyn McClanahan, a physician and founder and director of financial planning at Life Planning Partners in Jacksonville, Florida.

Consumers may not realize that you can contact the health-care provider or the hospital and ask to negotiate.
Jenifer Bosco
Lawyer at the National Consumer Law Center

"I know it is really tough right now, especially with the number of people that are losing their jobs," she added. "They can't afford COBRA and unfortunately short-term medical plans don't cover preexisting conditions and medical underwriting."

COBRA is federal legislation that allows workers to continue for a time with their former employer's plan. However, the employer no longer subsidizes the cost.

Other people may have insurance but face high deductibles, copays or coinsurance.

In some cases, it may lead people to miss out on necessary care. About 7.5% of U.S. adults over age 18 did not get needed care during the first quarter of 2020 due to costs, according to the National Center for Health Statistics.

Here's how you can navigate high medical costs.

Get an itemized bill

Ask for an itemized bill, so that you can review it and make sure the charges are correct, suggested McClanahan, a member of the CNBC Financial Advisor Council.

There can be errors, such as incorrect patient, provider or insurance information, as well as incorrect codes for the procedures and duplicate billing.

For instance, Medliminal, a company that identifies medical billing errors, generally finds that 25% of the charges on the bills it has reviewed are not billable.

Look for other sources of payment

You may have overlooked ways to cover your bills.

"I often had people eligible for Medicaid or subsidized insurance that they were able to get," said Jenifer Bosco, staff attorney at the National Consumer Law Center.

"In some states, when you qualify for Medicaid, there is retroactive eligibility."

More from Invest in You:
Actor Chadwick Boseman died without a will. Why you should have a plan
Many Americans will eventually need long-term care. How to pay for it
The big lesson Suze Orman learned from her recent health scare

If you have no insurance, check with your providers to see if they offer a discount to uninsured patients.

There are also federal requirements for nonprofit hospitals to provide financial assistance programs for low-income patients. The aid varies depending on the state and the institution.

However, 45% of nonprofit hospital organizations routinely send out bills to patients who have income low enough to qualify for charity care, according to an analysis by Kaiser Health News, an editorially independent program of the Kaiser Family Foundation

Ask to lower the bill

Brian A. Jackson | Getty Images

Once you have explored all the options for payment, it's time to see if you can get your bill lowered.

"Consumers may not realize that you can contact the health-care provider or the hospital and ask to negotiate," Bosco said.

Reach out, be nice, and tell the provider that you can't afford to pay the bill. Then, ask for a reduction.

Uninsured patients are usually charged the master rate, or the maximum that the hospital would charge for a particular procedure, Bosco noted.

She suggests asking to pay the Medicare rate, which health-care providers are generally very familiar with.

The billing people have gotten so used to negotiating that they expect it.
Carolyn McClanahan
founder and director of financial planning at Life Planning Partners

You can also check out the estimated costs of the procedure in your area on Healthcare Bluebook.

Remember, it's not the doctor you'll be dealing with but the billing department.

"The billing people have gotten so used to negotiating that they expect it," McClanahan said.

Don't expect to be successful at first, she noted.

Harness was able to get his bill down after filing a grievance with the hospital. In November, he was given a 30% discount for both surgeries, bringing the cost down to $56,152.40, he said.

VIDEO5:2405:24
How much it costs to beat breast cancer

He and Novick-Smith continued to follow up with the hospital to try to lower the bill. They argued he shouldn't have to pay for the second surgery since it was most likely a complication from the clipping and stapling of the appendix tissue during the first surgery.

In May, the hospital reduced the bill to $25,143.20. Harness responded by offering $12,000, based on what Healthcare Bluebook noted was a fair price for an appendectomy The couple then got their bill knocked down to $22,304.17.

After Harness and Novick-Smith brought their story to Kaiser Health News, the hospital came back with their final offer: $19,335.

Request a payment plan

Portra | DigitalVision | Getty Images

Once you have your final, negotiated bill you can still request to go on a payment plan.

Be very careful and make sure that the monthly payments are ones you can afford, Bosco advised.

"Try to come up with a realistic payment plan," she said.

Harness is now on a plan to pay off his final bill. It is still a big chunk of his monthly income, but fortunately some friends set up a GoFundMe account to help him out.

"It felt really great that people cared to give a portion of what little they had to help me out in this situation," he said.

Harness now has insurance through the U.S. Department of Veterans Affairs. He said he has also been approved for VA disability benefits for his hearing loss and has applied for benefits for spinal and knee issues due to his time in service.

SIGN UP: Money 101 is an 8-week learning course to financial freedom, delivered weekly to your inbox.

CHECK OUT: I’ve made thousands of dollars a month in passive income for the past 5 years: Here’s how via Grow with Acorns+CNBC.

Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.