Tips on Avoiding Medical Debt

 One of the leading cause of bankruptcy in the United States today is medical debt.  More and more families are finding that the cost of a serious illness is a steep one and their finances are being overwhelmed.  With that sad fact in mind we put together a Blog filled with some great Tips on how to avoid medical debt and the problems that it can cause.  Read it and then use the Tips so that you sleep better at night knowing you’re prepared.

Tip 1) Find and purchase a ‘catastrophic’ health insurance plan. The fact is, going without insurance is not advisable and could ruin you if a serious illness or accident happens.  Premiums for a catastrophic plan are much more reasonable because, normally, the deductible is very high. It won’t cover your prescriptions or, frankly, anything else but, in case of a medical emergency that is very costly, at least you will have this safety net.

Tip 2) No matter which carrier you use you should take some time to familiarize yourself with their rules and regulations about what is covered and what isn’t and the many other variables they have. For example, seeing Doctors that are in-network are usually much cheaper than those that are out-of network.  Knowing what your most cost-effective options are is almost as important as knowing what’s covered.

Tip 3) Hospitals and Doctors aren’t infallible so check your statements and make sure that you’re not paying for something that wasn’t done or isn’t yours.  This takes some time and effort but the fact is that more than 40% of all hospital bills have some type of error and, if you don’t spot them, nobody will.  If you have problems the people at the Patient Advocate Foundation can help.

Tip 4) If you’re having trouble making payments don’t stop making them but instead call your provider and see if you can negotiate to pay them using some type of payment plan.  If you can prove hardship in many cases you can even have the amount you owe reduced so don’t wait if you’re having trouble keeping up.  If absolutely necessary find ways to come up with funds in a pinch, like applying for quick payday loans.

Tip 5) Set up your own emergency health fund and ‘donate’ towards it monthly. This is like a health savings plan and, if you ever find yourself in a position that you have sudden health or medical bills, can be a financial life-saver. Flexible Spending Accounts or a Health Savings Account (HSA) are a great idea here but, since there are tax benefits with this type of account, the IRS will be checking to make sure you qualify.  Just fyi.

The fact is, simply crossing your fingers and hoping for the best isn’t a good idea when it comes to medical expenses.  Having something is always better than nothing but, if you can afford it, having more than you need is always good too.

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