How to Manage Unexpected Medical Bills

Contending with a health crisis is never easy. Managing an illness or injury can be a long and frightening process. But it’s not only the stress of the condition that you have to deal with. The financial burden of medical care can also take a tremendous toll.

There are ways, however, to manage unexpected medical bills without depleting your life savings. We’ll show you how.

Analyze and Negotiate Costs

When you’re dealing with unexpected medical bills, one of the first and most important things you can do is request itemized invoices for every charge. Not only does this allow you to identify superfluous charges and other billing errors, but it also enables you to better negotiate your medical care costs with the health provider’s billing department.

In addition to negotiating with the billing department for reduced fees, you may also be able to negotiate a low or no-interest repayment plan that accommodates your budget. Typically, healthcare providers will accept payment in monthly installments, provided that the debt is paid off in full within a year or so.

When you’re negotiating price discounts and repayment plans, you might find it helpful to partner with a patient advocate. They can advise you not only on the financial resources that may be open to you, but they can also counsel you on what is and is not reasonable in regard to care costs.

Consider Alternative Sources of Funding

Once you’ve attempted to negotiate your costs and you’re certain that your healthcare provider will not accept further discounts, it’s time to consider alternative sources of funding. A low or no-interest repayment plan as described above can be an affordable and easy option for managing your medical bills. However, in the long run, it may not provide the most savings.

Many healthcare providers will offer steep cost reductions if you pay the bill immediately and in one lump sum. Given that these discounts may slash your total costs by 20, 30, or even 40%, it may be worth your while to consider whether you have any alternate sources of funds to draw on.

For example, though your retirement funds are generally sacrosanct, the price reductions you earn from paying in full upfront may make tapping into your retirement worthwhile. The key is to ensure that you have a plan for replenishing those funds, including accommodating any fees or penalties that might come from an early withdrawal.

To maximize your retirement savings, for instance, you might diversify your investment portfolio or, if your employer matches your contributions, you might increase your retirement fund allocations per pay period. This can help you quickly restore what you lost when paying off your medical debt at a discount.

Consider Using Credit (Judiciously)

If your healthcare provider is unwilling to accept a repayment plan or if they’re offering a significant discount for a single, lump sum payment, then you might consider putting some or all of the debt on a low-interest credit card.

This isn’t a decision to be made lightly, however. Credit card debt can be devastating in the long term. Creditors can and frequently do sue over unpaid credit card bills.

For this reason, if you do choose to use a credit card for your medical expenses, ensure that it’s a card with the lowest rate. If possible, you may choose to transfer and consolidate credit balances from higher-interest cards onto a single, lower-interest card. Above all, ensure that you’re making more than the minimum payment each month, that every payment is on time, and that you pay off that credit debt as quickly as you can.

The Takeaway

A health crisis can take a tremendous physical and mental toll, but it doesn’t have to take a financial toll as well. With strategy, effort, and diligence, you can manage those unexpected medical bills without draining your bank account.

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