Four Ways to Manage Medical Debt
Unfortunately, when you get sick or injured, getting better is often not the only concern. Even if you have health insurance, hefty medical bills can hang over your head like an ominous rain cloud. Many people feel they have no choice but to ignore the bills or eventually file for bankruptcy. However, these aren’t the only options. There are many ways you can make paying your medical bills more manageable.
Check the bills
Often people are so shocked at how much they owe when they first open their bills that they forget to look at them in detail. However, since medical bills are frequently inflated, looking over them carefully could save you money. Maybe you were billed for a four-day stay in the hospital when you only stayed two or charged twice for the same medication. If you see that you were billed in error, contact the medical provider to have the charge removed.
If you have health insurance, it’s a good idea to make sure your insurance company paid for everything covered in your plan. If an insurance company denies a claim, the medical provider will just bill you, even if the treatment is covered under your plan.
How easy is it to get an insurance company to pay a denied claim? If it was merely a clerical error, it should be simple. If you are dealing with a penny-pinching insurance company trying to wiggle out of a commitment, it could be harder – but not impossible. Most insurance companies allow you to appeal decisions, and if you submit evidence to support why the treatment should be covered – like a letter from your doctor – you may be able to have the denial overturned.
Ask for a repayment plan
Even after billing errors are corrected, the amount you owe may still seem frighteningly large. However, there is no need to panic if you can’t pay a bill in full. Most medical providers will allow you to make smaller payments until the bill is paid off and, in many cases, they won’t even charge interest. Think about how much you can afford to send each month, and let the medical provider know.
If the medical provider doesn’t accept your proposal, should you not send any money? Not necessarily. Few people will actually refuse money, regardless of how small the amount is. But understand that that doesn’t mean you’re immune from being sued or having the account be sold to a collection agency. Not paying your mortgage or other important expenses to get more cash for your medical bills is usually not a good idea.
Look for assistance
If you have medical bills from a hospital, you’re probably well aware of how high the charges can be. Luckily, many hospitals get government funds and donations to cover bills for patients who can’t pay the balances themselves. Other medical providers may not get such funds but may give you a discount if you describe your hardship.
Talk to your hospital’s billing department or financial counselor about its programs. Remember to find out what the application procedure and qualifications are; often assistance programs are restricted to people who owe above a certain amount, have income below a certain limit, and/or have no medical insurance. Even if you ultimately don’t qualify, it doesn’t hurt to ask.
Hospitals aren’t the only places where you can get financial assistance with your medical debt. Many nonprofits provide the same service. Like with hospitals, nonprofit programs are often restricted to limited income and/or uninsured individuals.
To find out what programs are available in your area, contact your local United Way or dial 211 – an information referral service available in most communities. You may also be able to get information from relevant affliction support groups.
Create a plan for the future
While your current concern may be the bills you need to pay now, chances are you’ll have more medical bills to pay in the future. Getting sick is just a part of life. However, if you start saving today it’ll be easier to pay whatever bills come your way tomorrow. While you can put your savings in a savings account, you may also want to make use of one of the tax-advantaged accounts available for medical expenses.
If your employer offers it, one option is to set up a flexible spending account (FSA). With an FSA, at the beginning of the enrollment period you tell your employer how much you want withheld from each paycheck and sent to your account.
You typically must pay for the costs out of pocket first and then get reimbursed after submitting a claim form. While the money sent to an FSA is not taxed, there is one drawback: you lose any money not spent by the end of the year. Thus, you shouldn’t contribute more to a flexible spending account than you reasonably expect to spend.
Another option is a health savings account or HSA. Like with a flexible spending account, the money contributed to an HSA is not taxed. However, you don’t lose the money left over in the account at the end of the year.
So, why would anyone choose an FSA over an HSA? A major reason is that HSAs aren’t available to everyone. In order to qualify, you must be enrolled in a high-deductible health plan, which is a plan with higher deductibles and lower premiums than traditional plans. If you have a traditional plan, you’re out of luck.
Medical bills can linger long after an injury or illness has been treated. While the amounts owed can seem unbelievably large, remember there are many things you can do ease the pain of bill paying.
Resources
Patient Advocate Foundation
1-800-532-5274
www.patientadvocate.org
Provides information to patients experiencing problems with their insurance company or employer. Also offers a co-payment assistance program.
Partnership for Prescription Assistance
1-888-477-2669
www.pparx.org
Provides information on programs offering financial assistance with prescription costs.
HealthWell Foundation
1-800-675-8416
www.healthwellfoundation.org
Provides grants that can be used to pay for prescriptions, co-pays, deductibles, and insurance premiums. Available to patients with a variety of illnesses.
CancerCare
1-800-813-4673
www.cancercare.org
Offers financial assistance programs to help cover the costs of cancer treatment and co-pays.