Debt that comes from unpaid medical bills is a major concern for many Americans, and also is one of the main factors for the national conversation about health insurance coverage. Medical debt is extremely difficult to overcome, the individual did not have money to pay for it at the time, and due to the fact it is a medical expense there is a high chance they are not working full time. Currently, over 79 million Americans, not only have medical debt but are having trouble making their medical debt payments. Below are some tips to keep yourself from going into total financial ruin over medical expenses.
Obviously, the best thing to do to prevent medical debt from piling up is to not let it medical bills turn to debt in the first place. Of course, medical debt cannot always be prevented, as we do not know what the future stores. However, by preparing early before anything happens, you could prevent a future tragedy from financially ruining you on top of the heartache and physical damage it will cause.
The first prevention measure should be some sort of medical insurance. If you are a part time employee or self-employed, or another circumstance where medical insurance is not provided to you there are some other options that you could qualify for. Self-funded group insurance health plans are where a group of people, not necessarily co-workers all put in monthly premiums to form their own plan. This is common currently with retirees. Medical catastrophe insurance plans are offered to individual under thirty or people who due to financial hardships do not get medical insurance offered through their work. With medical catastrophe insurance, your insurance will not kick in until you get to a high dollar amount. You will pay high co-payments; however, just like its name would suggest, it prevents the medical emergency from being financially catastrophic.
On top of getting your health coverage all lined up, one of the best things you could do to prevent medical debt is to have an emergency fund. When everything is going well, and you are healthy enough to work you should put away as much money as you could spare each month into a separate bank account. This money is not used when new I-phone comes out. This money is set aside specifically for emergencies to prevent going into debt over the emergency, which with the interest payments will make the emergency cost even that much more money.
You had a medical emergency, and the receptionist gave you your bill and you do not have the money now what happens? It is important to not put these medical bills on your credit cards if you are not going to be able to pay it off right away. Credit cards have far too high of interest rates, your medical debt will quickly compound and grow out of control. Medical offices will set up a payment plan for you and are often accommodating with what you can afford, with either a far lower interest rate then a credit card or none at all. On top of the payment plan most medical offices and hospitals can be negotiated into a lower price. It is of course in your best financial interest to pay it off as quickly as possible to prevent having to pay out more money. After a period of non-payments your unpaid health bills will be sold by your medical provider to a collection’s agency. Collection agencies are often harder to deal with then the hospital or medial office, so it is important to attempt to avoid a prolonged non-payment period and continue to channel your used car sells men to negotiate over the price and payment plan. Once a person’s medical debt is sent to a collections agency there are many non-profit and state sponsored plans that can help make payments or ease the burden.
The best time to prepare for a medical emergency is yesterday, the second-best time is today. The best health insurance available for you is your first step at handling medical bills. Accidental coverage such as Aflac can also help with unexpected accidents and medical bills. If you do get medical debt, it is important to keep this debt separate and not put it on a credit card. Keeping it separate saves you money in interest. Medical debt is also weighted differently and more favorably on credit reports.