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    8 Tried-And-True Tips For Dealing With Medical Debt

    “People are now experiencing healthcare bills that are more like a mortgage payment."

    Your health is priceless. But if you’re dealing with medical debt, you’re not alone. At least 72 million Americans are struggling to pay off medical bills.

    Giphy / Via giphy.com

    What’s even more shocking is that a recent survey found that 1 in 3 consumers would put off COVID-19 medical care to avoid a bill from their provider. The survey also found that while medical bills are consumers’ second-biggest source of all financial stress (just behind credit card bills), they are the lowest priority to pay compared to other bills like internet and cable.

    Whether you’re dealing with thousands of dollars of medical debt or have a small medical bill, owing a provider money can be a stressful situation and limit your finances in other ways.

    Here are 8 tips for dealing with medical debt:

    For some expert insights, I spoke with Kent Ivanoff, the CEO of the medical billing platform VisitPay, which helps patients simplify the process of viewing medical bills and repaying them on time. VisitPay is free to patients whose provider signs up.

    And keep in mind, your money and your health are personal so what's worked for others may not work for you. Always consider your own needs and situation first before acting on any financial advice.

    1. First, if you have insurance, make sure you understand what it covers and where you can go for care.

    Young mom sitting with her son during a pediatrician appointment
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    The fact that medical care costs money (even if you’re insured) pressures many of us to make our healthcare needs a financial decision. One of the best ways to ease this financial stress is to find out exactly what your insurance covers early on so you are pretty informed once you seek medical treatment.

    “When it comes to medical bills, most consumers don’t know what they owe and why they owe it,” Kent Ivanoff says. “People may not be able to reconcile the benefits they get with insurance and what a provider’s bill shows. As a result, one of the main reasons why people don’t pay their bills is because they are completely confused by them.”

    Your insurance company may send a packet to your home that describes your coverage in full detail or provide this information online. You can always call them as well and request to have someone go over your benefits with you over the phone.

    In addition to knowing what your deductible and out-of-pocket costs are, you should record information like:
    - Which providers you can visit especially if you have to be in a certain network to receive the maximum amount of coverage from your insurance company

    - How much your copay is for doctor’s visits, specialists, ER visits, and overnight hospital stays

    - Your coinsurance amount, which is the amount of money you owe a medical provider once your deductible has been paid

    - Coverage amounts for preexisting conditions and prescriptions

    Ivanoff also recommends that people buy the insurance plan that truly meets their medical preferences and budget for more coverage if needed.

    “Some people buy a plan with a lower premium thinking they will save money but what they don’t realize is that their deductible is often much higher — to the tune of several thousands of dollars,” Ivanoff said.

    Even if you pay a higher premium each month, if the coverage is better, this could save you a lot of money when it comes to future medical bills.

    2. Always ask for an itemized bill when you visit a provider.

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    It never hurts to request an itemized bill from your provider. Check it to make sure the items you’re being billed for are correct and any credits and copays have been deducted from the total.

    It’s no secret that medical bills can have errors from time to time and it's possible that a mistake is making your bill higher than it needs to be. Do your due diligence by making sure everything on your bill is accurate and makes sense.

    Ivanoff says that another one of the biggest pain points for consumers is that they often don’t understand what they owe and why they owe it. You can always reach out to your provider's billing department to get clear on what you're being billed for and what portion of it you're responsible for paying.

    3. Don't be afraid to ask about payment plans and hardship assistance.

    Stethoscope on a medical bil
    Prapass Pulsub / Getty Images

    Providers and hospitals know that medical care can get expensive so they often offer payment plans with no interest charges and financial hardship assistance. If you are struggling to repay your bill, be sure to ask about payment options.

    You may need to apply and meet certain income requirements to qualify but it is worth the effort if you can get your bills lowered. Even if you think you won’t qualify, still ask about medical bill assistance since there may be another program offered that can help you.

    4. Ask to negotiate your medical bill. You might be able to talk your debt down.

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    If there is no assistance available to help you pay down your medical bills, you can still try to negotiate your bills. First off, make sure you’re calling the right department, which would be the billing or financial department. They are the ones who can make the decision to lower or reprice your medical bills.

    If you don’t have insurance, see if you can use a resource like Fair Health to see what the fair market price is for your medical treatment. Compare this price to the one you received on your bill and use this as grounds to negotiate your medical bill amount. And if you're looking for more tips, check out my post on getting your medical bills lowered.

    5. No matter how tempting it may be, don't try to ignore your medical bills.

    Person opening an empty wallet
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    When you receive a bill that you aren’t sure you can pay, the worst thing you can do is ignore it. Try to give the provider a call and set up a payment plan — even if you’re only able to pay a small amount per month.

    “People are now experiencing healthcare bills that are more like a mortgage payment,” says Ivanoff. “On the bright side, providers do want to work with you and help you get your bills paid off. Health systems are very community-minded because providers know that they will likely be seeing you and your family again to provide care in the future.”

    Depending on your income and savings, hardship assistance may be available if you’re struggling to make a payment on your medical bills. Call the hospital or provider and explain to the billing department what’s going on in your life right now that is preventing you from being able to afford to make payments. If the hospital is a nonprofit, it may even be required to provide hardship assistance.

    Let’s say you lose your job or are faced with another financial emergency. You’ll need to provide proof and documentation so the provider can either reprice and lower your medical bills or give you a deferment period for a few months during your financial hardship.

    6. And use personal loans or credit cards as a last resort.

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    Taking out a personal loan or using a credit card with a high interest rate should be a last resort option to help you pay off medical debt. If your medical bills are about to be sent to collections or if you are contemplating bankruptcy, a low-interest personal loan may provide some relief.

    However, keep in mind that if you work with your provider and work to set up a repayment plan early enough, you shouldn’t have to pay interest at all. This means taking out a loan or using a credit card — especially if you have a lower credit score — could actually cost you more money to pay the bill depending on the interest rate and other loan fees.

    Instead, carefully look into all your options for relief, whether it’s negotiating or working with a nonprofit organization, that can help you request to lower your medical bills.

    7. Put a solid debt repayment plan in place.

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    Out-of-control medical debt can lead to several financial problems sooner or later. Medical debt is cited as the number one cause of bankruptcies in the US and it can negatively affect your credit score as well.

    Once you know what your health insurance benefits are and have reviewed your bill carefully, start putting a plan in place to pay off your debt in the coming months.

    This may mean consolidating multiple medical bills or prioritizing bills by tackling the one with the highest balance first. See if you can earn extra money to help you make extra payments toward your medical debt by taking on side hustles during your spare time and making cuts in your budget (check out my bare-bones budget for ideas).

    Remember, medical debt doesn’t last forever, especially if you prioritize your medical bills and examine all your options.

    8. And finally, use an HSA or open a medical savings account to help you pay off future bills. Setting even a little money aside can help you stay out of debt in the future.

    A stethoscope, medicine, face mask, and cash
    Ediebloom / Getty Images

    An HSA is a Health Savings Account which can be offered through your employer-sponsored health insurance if you have a qualifying, high-deductible medical plan. What’s great about having an HSA is that pretax income from your paycheck gets transferred to this savings account regularly.

    You can then use this money to pay for qualifying medical expenses. You can also invest with your HSA contributions and enjoy some generous tax benefits like tax-free contributions and withdrawals (so long as they’re for medical expenses), as well as tax-free growth when you invest.

    If you don’t have the option to open an HSA, create your own by transferring money for medical bills to a high-yield online savings account. Set up automatic transfers each time you get paid, whether it’s $10, $50, or $100. The money will come in handy whenever you receive a medical bill and need to set up a payment plan.

    What's helped you deal with medical debt in the past? Share your best tips in the comments below.

    And for more money tips and tricks, check out the rest of our personal finance posts.

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