Medical debt piles up very fast. For most of us, insurance only covers a portion. Though insurance that covers 80 to 90 percent of medical costs sounds like a great deal, even your 10 to 20 percent portion can quickly overwhelm you financially when your family’s medical bills total in the thousands or tens of thousands.
With most Americans living paycheck to paycheck, out-of-pocket medical expenses are often impossible to pay immediately. Though the idea of simply penning out a check and being done with the bill is attractive, it’s most often unrealistic. To overcome medical debt, you need a plan.
Make Sure the Bills are Accurate
Most of us are used to bills being pretty accurate. Errors on mortgage statements, credit card bills, and electric bills happen, but most of the time, they’re correct.
The same cannot be said for medical bills. Medical billing is a whole new ballgame of errors. Patients are routinely billed for things their insurance covers. Lab tests and other services are frequently billed at the wrong rates. Sometimes, patients are double-billed for the same services they already paid for. You may even be billed for the wrong services! Keep track of your medical appointments, procedures, and hospital stays. That way, you can look at your medical bills and compare them to your own records to make sure you are paying only for the services you received.
With medical billing, errors are commonplace; the results are bills for thousands of dollars when you should have little or no out-of-pocket expense. Never pay a medical bill unless you understand it. If you have questions about insurance coverage, get the right answer before you pay. Above all, never assume the bills are accurate. Always verify them carefully.
Charging bills on credit cards or dipping into retirement savings in order to pay medical bills are terrible strategies for taking care of medical debt. The interest rates on debt and the tax consequences of early retirement savings withdrawals are far more expensive than paying off your medical bills through a payment plan. Most hospitals are happy to work with patients to find a fair payment plan. Hands off the retirement accounts and credit cards!
Work Out Payment Arrangements
Don’t feel bad about needing to make payment arrangements. Most people need time to pay off medical bills. Before committing, analyze your budget carefully. Remember, you cannot live in poverty while paying off your medical bills. That will only lead to other problems. If $25 per month is what you can afford without hardship or acquiring other debt, then stay firm about your $25 limit.
Use the Debt Snowball
If you have a bunch of medical bills, pay off the easy ones first! This gives you the psychological advantage of paying off a bill completely. Once you have finished paying off one debt, apply that debt payment to your next biggest bill. You will be able to pay off your debts much faster when you use this principle.
Medical bills can be a huge burden. The high cost and the inaccurate billing are enough to drive anyone crazy. But you don’t have to panic. Start by finding out how accurate your bills are. Then work out a payment plan that you can afford, and use the debt snowball to chip away at the debt mountain until it’s gone!
You can get out of debt. You just have to start with a plan and some common sense with finances!