Whether you have a stack of insanely high healthcare bills or just a growing sense of anxiety over how you’ll manage medical costs in the future, taking action now can help you avoid a financial disaster.
When you are faced with years of financial hell, bankruptcy can seem like an attractive option. Of the 29 percent of Americans who are struggling to pay their medical bills, seven in ten (73 percent) have had to cut back spending on basic living expenses such as food. Six in ten have drained their savings accounts and taken on credit card debt, according to a March 2017 report by the Kaiser Family Foundation.
Deciding whether debt relief is truly worth taking a 10-year hit on your credit report is a personal decision. Financial experts generally recommend filing for bankruptcy only if your debt equals 50% of your income, and you are highly unlikely to be able to pay that debt off within five years.
Thankfully, there are ways to avoid being swamped with medical bills.
1: Know Your Insurance
Review your coverage, especially the disclaimers and anything else that appears in a tiny typeface. Ask questions about anything you don’t understand. Take notes, and get any guidance that you receive in writing if possible. If you have an ongoing medical issue, or know that you’ll need certain types of care, you’ll want to pay attention to all coverage information pertaining to those concerns.
2: Make a Plan
Know what emergency rooms and urgent care clinics are in your insurance plan’s network. Unless it’s a true emergency, head to urgent care rather than the ER. Consider using telemedicine services to save money on treatment for issues such as flu, allergies, infections, and other common health problems.
3: Do Your Research
If you know you’ll need a medical procedure, investigate to find the healthcare facility that hits the sweet spot between excellent care and affordability. Good places to find comparative cost information include Fair Healthand the Healthcare Bluebook.
4: Don’t Pull Out Your Credit Card
Avoid charging medical bills to credit cards, even if you are offered a discount for doing so. Once that charge hits your card, you’ve limited your ability to negotiate your medical debt or get financial assistance to help you pay the bill. Additionally, medical debt payment plans often have no or low interest rates. The only exception to this rule is if your medical bill is low enough for you to pay it off quickly. If so, then go ahead and use your credit card.
5: Be Proactive About Negotiations
The last thing you want to do when you or a loved one is sick is to haggle over money. But don’t ignore the bills. Negotiating with the healthcare provider is the absolute best chance of getting the bill reduced and/or getting a payment plan that you can live with. If you disregard their calls and letters, they aren’t likely to think of you as a responsible person who is concerned about paying your bills. And once the bill goes to collection – which can be in as little as 30 days – forget about negotiating a deal that will benefit you. Plus, your credit rating takes a hit as soon as collection activity hits your report. While medical bills are typically evaluated differently than consumer debt by credit reporting companies and lenders, any debt that has gone to collections will drag down your credit rating.
6: Don’t Assume Your Bills Are Correct
Depending on whose statistics you believe, 30%-80% of all medical bills contain errors. To avoid overpayment, you need to review all your medical bills very carefully. To do this, you will need to get an itemized bill from your healthcare provider – simply call and ask them to provide it. Then review the bill, looking for any discrepancies or potential errors. Look for duplicate charges, charges for services that were cancelled or rescheduled, and charges for procedures/services that you didn’t receive.
7: Push Back on Rejected Claims
If your insurance company refuses to pay a claim, find out why. Claim refusal canbe caused by medical coding errors in the paperwork submitted by your claim provider. Check the Explanation of Benefits (EOB) that your insurance company provides you with after it pays or denies a claim, along with your medical bill to see if you can spot any errors. You can also ask if a change in the code that was used would make the claim acceptable to your insurer. There are different ways to code medical bills, and sometimes a perfectly legitimate change can result in a payable claim.
8: Bring in a Professional
Dealing with insurance companies and healthcare provider billing departments is no one’s idea of a good time. If you simply don’t have the energy or inclination to deal with the process - consider working with a medical bill negotiation service rather than trying to find errors and manage bill reduction discussions on your own. Medical bill negotiators know how to navigate the system, and are likely to be far more successful in spotting errors and getting cost reductions than the average healthcare consumer. They can even negotiate the costs of medical bill estimates. The cost of a medical bill service is usually a percentage of the negotiated discount, or an hourly rate plus the percentage, but you can find supplementary benefit plans that include free access to medical bill negotiation services.
By following these tips, you can help prevent medical bills from ruling your life and putting you into bankruptcy and other stressful situations. Don’t just ignore your bills and watch them accumulate or hurt your credit. Act now, be informed, know your options, and take advantage of the resources available to you.