Here’s a real-life story to start with -
Katrina Alfred's life was flowing smoothly until the year 2010, and she retired early at the age of 45. She was then running a consulting business and unfortunately, after a couple of years, her elder son of age 14 was diagnosed with lymphatic leukemia.
Katrina's private insurance was not sufficiently covering the cost of experimental treatments for this rare form of the disease, so she had to sell off all assets and also exhausted all the retirement funds on his treatment. Even then, Katrina ended up owing a straight $75,000 in debt due to uncovered medical bills.
In Katrina's words "Friends and family told me to file bankruptcy, and I was on the verge of doing so; however, wanted to rebuild my credit." It took her more than five years, but finally settled things and was able to pay off the medical . "By the year 2016, we were back in the track" says Katrina, "and my son is healthy and happy with me now."
Most of us may have real-life stories like this to share, and Katrina is far from being alone.
The case of staggering health care debts
It is a fact that many Americans are now facing troubles with staggering medical debts due to health bills uncovered by insurance.
The Kaiser Family Foundation New York Times survey held back in 2016 had shown that one among five working-class Americans having insurance encounter problems in paying out their medical bills in the past 12 months. The other findings in the survey were as below:
- For 31% of the surveyed sample, the total amount of their uncovered medical bills reached up to $5,000
- For another 13%, it went beyond $10,000.
- About 58% found it difficult to pay off the medical bills and were getting calls from collection agencies.
- Another 11% claimed to declare bankruptcy in which medical bills had been a major contributing factor.
Seven steps to effectively control medical debt
If you are hit with a few hundred thousand dollars of medical debt, these steps may help reduce or stay out of medical debt.
#1. Understand your health insurance inside out
It is essential to know what your health insurance covers. Know which of the medical service providers are there in the network. For non-emergency healthcare engagements, it is ideal first to call the insurance provider to make sure that the service you are going to avail is undercover and make arrangements of the pre-certification as needed. There are many cases reported like the surgeon who a patient approach was in the network, but the lab which did the diagnostic procedure was not covered, which cost the patient thousands of dollars out of own pocket.
#2. Enquire about the possible cost of the planned treatments and procedures
Paying for healthcare services is the same as anything else you buy. Would you make any major purchase without shopping around and knowing the price up front? Similarly, you can explore options and inquire about the cost of treatment you plan. To your surprise, you may find amazing offers on comparing the cost of medical procedures and treatments at different facilities.
#3. Think of putting the medical bill on credit card
It is not always an ideal solution, but when other things fail, you can think of putting your medical bill on credit card to avoid your debt being sent to a collection agency. You can avail credit based on the interest rates and other features. However, don’t sing up for any medical credit cards or loans right away even though the clinics push it without comparing it with your standard credit cards.
#4. Go for a preferred pharmacy
Network pharmacies may be charging a lower cost on particular medications prescribed by the physicians. During the past, pharmacies used to compete based on the location, however, no they are competing on the basis of quality and price. For a person seeking medical care, a preferred network pharmacy is a right way to go as they offer lower pricing on drugs and lower dispensing fee. Say, for example; an actual prescription costs $50 at the local pharmacy may cost $100 if the health plan doesn't include any preferred pharmacy network.
#5. Ensure that you have a bill
It is essential to go through the mail and ensure that you have a due balance. It is noted that sometimes insurance companies may send an explanation of the benefits to inform you what is paid on your behalf and what not. The EOB may actually give you a head up to the medical bills which are on the way. If you find that the insurance provider paid only part of the claim as per the EBO, you have to wait for the doctor’s office to confirm the accuracy of your medical bills before making the payment.
#6. Pay your children's medical bills
Don't simply ignore the bills from your kids' doctor. Most probably there was an agreement signed by you among the policy forms you have filled to pay your child's medical expenses which may not be covered by the insurance. If you ignore it, it may hurt your credit in the long run. So, remember to pay off your child's medical bill too on time, which is your responsibility.
#7. Feel free to negotiate
As like any other service, once you receive a medical bill to be paid out of our pocket, feel free to check it out with the doctor's office to see if you can get it lowered. Medical practices have pricing packages which vary largely. If you are charged $500 for a contract MRI for lab evaluation, then you can argue with them to get it reduced. Sometimes, the medical industry counts on your inability to understand what is billed for and they may use it against you. So, sometimes what you owe in terms of medical debt isn’t necessarily so. In fact, you don't have to argue with your doctor about it, but the right person is the billing clerk.
All the above tips can be used diligently based on the nature of your incurred medical debt to try and get rid of it in your favor. On the other hand, you can also work with the insurance provider to extend the scope of your health care coverage in the forthcoming years.