The running joke for the past few years has been that, in the U.S., if your health crisis does not kill you, the bill will.Jokes aside –reliable sources reveal that medical issues are one of the things separating two-thirds of Americans from bankruptcy.
If you live within this filter bubble, you may believe there’s nothing you can do, and that all Americans are lambs to the medical care slaughter. Navigating the complex medical billing and health insurance system in the U.S. without proper knowledge puts you at risk of falling into a medical debt trap.
Therefore, it is best to be informed about health-related laws and policies, such as your insurance coverage, your state’s consumer protection laws, and hospitals’ financial assistance programs.
This article highlights what you can do to avoid, manage, or get rid of medical debt. The first part covers how to avoid it, and the second covers managing or getting rid of it.
4 Tips on How to Avoid Medical Debt
According to a recent Kaiser Family Foundation (KFF) survey, 41% of U.S. adults are living with the post-treatment chronic condition known as medical debt. Even with the right insurance coverage, many Americans are hit with huge out-of-pocket costs from various charges.
But it is possible to avoid falling into the medical debt trap. Here are several ways to avoid medical debt:
- Make healthy life choices
Some of the things that bring us to the hospital are avoidable through exercise and a balanced diet. If that is your case, of course you can get treated without debt, but why go down that road while it is easier to make healthier life choices and stay away from the hospital?
If your health issue is not related to unhealthy life choices, you can avoid medical debt in the other ways below.
- Compare prices
You can prevent medical debt by comparing prices between hospitals and care centers if it is not an emergency. Many websites help patients to this end, and they can estimate prices for both in-network and out-of-network doctors.
- Get a good insurance policy and understand it
Like with other binding agreements, you should not sign up for an insurance policy before reading the fine print. It is not uncommon to come across policies that do not cover some things people assume they do, either due to misdirection, errors, or misconception. As such, the copays, deductibles, and coinsurance terms should be clear before signing.
If you can, find a good insurance policy that maximizes coverage and has a reasonable deductible. If there’s something you do not understand, call the insurer and ask someone to explain all the potential out-of-pocket costs.
Apart from that, the in-network and out-of-network doctors typically have different prices, usually detailed in the fine print. Some insurance plans may have details, such as requiring a referral from a general doctor to see a specialist. If you do not understand these details, you may seek medical care while thinking you are covered, only to end up in debt.
- Sign up for public insurance
If you need health care and are uninsured, you might qualify for Medicare or Medicaid. You can take advantage of this public insurance by asking the hospital or provider to check your eligibility, and then stick to providers who take part in those programs.
- Ask for a waiver or discount
Many hospitals offer “charity care” to patients earning less than two to three times the federal poverty level. They typically waive or discount bills for eligible patients. Since each hospital has its own eligibility requirements, be sure to research your hospital beforehand to determine whether you can use this option to manage your medical debt.
5 Tips for Managing Medical Debt
The moment you are hit with medical bills, you have to take action immediately. If you ignore the situation, the interest may keep piling up or end up in collections, which may affect your credit score.
If you are struggling with medical debt, you can manage it effectively and even get rid of it. The tips below should help you manage, reduce, or even eliminate unpaid medical debt:
- Double-check medical bills
What are you being charged for? Sometimes, the billing office may make typos and other errors that could raise your bill. Although the exact number of medical bills with errors is unknown, they range anywhere between 7% and 80%. Even a one percent chance is enough to double-check, considering how deep you could be in debt.
Double check for errors and ensure each charge reflects a service you received and there are not duplicate charges.
If possible, ask for an itemized bill, which lists the cost of each item or service you are charged for rather than the total cost. Studying each charge will allow you to determine whether there’s anything overcharged.
After checking each item and guaranteeing its accuracy, ensure they match the terms of your insurance policy.
- Advocate for yourself
You can ask for an aggressive discount for instant payment if you have the funds. Something like, “if I paid you 30% right now, will you write off the rest?” Chances are, the provider will prefer to save the time and money it would take to pursue you for payment.
Even if you can afford to pay lots of money, you can ask for a huge discount, say 25%, if you immediately pay a large down payment. If it does not work, you can ask the provider to charge you the discounted fee that Medicaid pays.
If that fails, ask if they have a zero-interest payment plan. If they agree to any terms, have it in writing.
- Negotiate your medical bill
Many people do not realize they can negotiate the bill or payment plan to end up with a lower bill and favorable payment terms.
If medical bills are in collection, healthcare providers accept pennies on the dollar, so even if you do not qualify for charity relief, you can try to negotiate. More and more people realize it is possible and are taking advantage, and providers agree because, in some cases, it is more profitable for them.
An angle you can use to justify the lower charge is to show them what you would have paid if you went to other providers in the area. Use NewChoiceHealth.com or HealthcareBluebook.com to estimate what you should be paying. Some health insurer websites have tools to estimate the total cost of various health procedures.
After negotiating the bill, whether successful or not, you can also negotiate the payment plan.
- Take advantage of the hospital’s financial assistance
Several states have very tight consumer protection laws for medical debt. Thanks to these laws, most hospitals have financial assistance programs, but very few patients know such programs exist or whether they qualify. These financial assistance programs vary in size and target, but the typical way is to financially help patients earning less than two or three times the federal poverty level.
Some states require all hospitals to check if their patients are eligible without them asking because those unaware of such programs often go into easily avoidable debt. If they do not, do not be afraid to ask, even if you are discouraged.
Some hospitals go the extra mile to discourage patients from taking advantage of their assistance program. They sometimes even make it a struggle to find details about their care policy. Dollar For has a very useful database where you can find details of each hospital’s charity care policy.
If you find the hospital offering the most generous program, you can avoid debt altogether.
- Contact legal services
If all else has failed, you need outside help. Several attorneys around the country can advise and represent you in medical debt cases. Some have decades of experience dealing with hospitals and collection companies, and they may argue the case on your behalf, especially if the hospital violated the state’s consumer protection laws.
The fear of falling into a debt trap keeps many people from seeking medical care, which risks their lives and, in some cases, the lives of friends and family. In-depth knowledge of health policies and laws can help avoid all these debt traps and manage or eliminate high medical bills that would take years to pay.
Pick a Customized Health Insurance Plan to Remain Debt-Free
Amid inflation and mounting medical costs, health insurance has emerged as a cost-effective way of risk financing. Health insurance plans offer a broad financial coverage that includes diagnosis costs, treatment costs, and hospitalization costs.
It is good to note that health is a personal matter and the degree of it differs from one patient to another as it is dependent on the various circumstances and stages one is in life. For example, the risk of certain health issues increases with age and the lifestyle one leads.
Since people have different health needs depending on their age and the lifestyle they lead, there arises the need for customized health insurance plans that allow more personal freedom, choice, and flexibility.
If you want a customized insurance plan, Healthcare Solutions Team has got you covered. We are the industry’s leading agents offering customized and affordable healthcare insurance plans designed to minimize medical costs while maximizing coverage. Ask a MyHST agent today what options we have and which is the best for your unique situation.
Healthcare Solutions is a wholly-owned subsidiary of the National General Insurance Group and Allstate Insurance Company, so rest assured you are getting quality service. For more information, contact us today and our teams will be more than willing to help.