While Congress debates a new health care bill, millions of Americans struggle to pay their medical bills. Insured or not, the rising costs of medical care and out-of-pocket or uncovered medical expenses has placed millions of Americans at risk of serious financial harm. In fact, medical debt is the leading cause of bankruptcy. Forty percent of Americans had medical debt in 2014. Of those filing bankruptcy, the records show that they had health insurance and carried little consumer debt. In other words, they were like all of us—budgeting, saving, paying bills on time, and trying to plan for the future.
The Kaufman Family Foundation issued a report last year. It found that one-quarter of Americans had at least one family member struggling to pay their medical debt. More distressing was the finding that their medical debt was not the result of chronic illnesses, but rather it came from an unexpected illness or procedure for which they were financially unprepared. If you think about it, how many of us can absorb a sudden and large expense, such as needing to replace the car or do major repairs on the house? When the unexpected occurs, we find ourselves with few options.
So what can you do if you are staring at a medical bill that you cannot afford to pay? Here are 5 strategies that place you in the driver’s seat and will help you avoid the penalties of medical debt.
- Carefully Examine All Papers That You Receive from the Doctor or Hospital
The arrangement of the itemized medical expenses on your medical billing statement can be somewhat confusing. In fact, what you receive in the mail could be an explanation of benefits and not an actual bill. Therefore, the first step to avoiding medical debt is to open the mail as soon as it arrives and carefully examine the document. Verify that you actually have a balance to deal with. If you see that your insurance carrier has paid only a portion of the expenses, then you can expect to see a bill soon. If what you have received is indeed the bill, then make it a priority to pay it as soon as possible. It’s not going to go away or shrink without active participation on your part. Medical billers do not give you much time. After only a few months, they send the bill to a collection agency and at this point your financial problems begin. The debt is reported to the credit agencies and will impact your future ability to obtain financing at favorable terms.
- Check for Errors
Confirm that any expenses identified as uncovered are truly uncovered expenses according to your insurance plan. Mistakes are made and if you believe the expense should be covered, contact your insurance carrier right away. It could be that the doctor’s office made a mistake when categorizing the service or procedure, or they forgot to call. Be proactive, empower yourself, you have nothing to lose and everything to gain.
- Don’t Hide, Tackle the Bill ASAP
The best thing to do with your medical bill is to pay it off in one lump sum and be rid of it. But, if you lack the funds for this approach, then call your doctor’s office right away and set up a payment plan. Your healthcare providers merely want to be paid for the services not covered by your insurance plan. They are happy to work with you. Ignoring the bill is the problem. If you found something questionable on your bill, call the doctor’s office and let them know you are investigating the statement. This way they will know you are not ignoring the bill. Silence on your part, and escaping from the bill are the basic ingredients leading to medical debt and those pesky collectors. You may also find out that you are eligible for financial assistance from the hospital, but only if you are proactive and deal with the bill in a timely manner.
- Everything is Negotiable
Or so they say. But in this case it is true. Your medical bill is not like the grocery bill. Contact your provider, explain your financial situation and fight for a discount on the total owed. Try to get it down by at least 30%. If you do not succeed, enlist the assistance of professional organizations skilled in negotiating medical bills. The bottom line is that you have some power. As mentioned earlier, doctors and hospitals want to be paid and they are willing to work with you. It is not their first choice to send bills to collection agencies.
- Get a Personal Medical Loan and Do Not Use Your Credit Card
In keeping with the theme that it is better to pay the medical debt as soon as possible, if you do not have the money, and are not able to work out a reasonable payment plan with the physician’s billing office, apply for a personal medical loan from an online lender like Peerform. The p2p medical loan application process is easy, quick and you will have the cash you need to pay your medical bill on time, avoiding any harm to your credit rating. Your medical loan is repaid through automatic installments, with no need to worry about late or missed payments, and your credit rating might even improve.