When we think about consumer debt, people tend to think of shopping bags and credit cards. But the reason a large number of Americans wind up in financial trouble isn’t self-indulgence or an inability to resist temptation. It’s medical debt. Whether you already struggle with paying hospital bills or not, here are 4 things you need to know about medical debt:
Medical debt is the #1 source of personal bankruptcy filings in the United States. In 2014, 40% of Americans went into debt because of a medical issue. Almost half of our entire country!
How sad to think that people already traumatized with an illness end up worrying about how to pay for it.
The illness is enough to fray your nerves so what do we need to know about medical debt?
4 Things To Know NOW About Medical Debt
1. Bankruptcy is on your record for many, many years.
The Motley Fool and other sources report that bankruptcies are, in fact, the number one cause of bankruptcy filings in America. Bankruptcy affects your ability to get loans on cars, houses, even rental properties AND it costs attorney fees just to file.
Talk with friends, family, multiple experts, and read up on the subject before you begin steps to file for bankruptcy.
Your illness is beyond painful, but the long-lasting effects of bankruptcy make the period of financial pain extend for a long time.
2. Not all health insurance is the same.
We are grateful to have good healthcare, but it can be very expensive. So, make sure you aren’t paying for too much or too little coverage considering your age, prior health, dependents, etc.
Even with good insurance, you can end up with huge deductibles and a lot of money spent.
The Bureau of Labor Statistics reports that consumer spending rose 2.4% but healthcare costs rose higher at 6.2% in 2016 alone – that’s a big jump! Forbes reports annual healthcare cost for a family of 4 is now $25,826! In fact, some say that their monthly health care insurance payments are inching up to the amount of a mortgage payment! That’s painful beyond a medical condition.
We all have to sharpen our pencils to figure out how to cover that rising expense.
One way to help “outsmart” some medical expenses is to consider an HSA (Health Savings Account). HSA accounts are available to all US taxpayers enrolled in a high-deductible health insurance plan.
HSA money may be used to pay a health insurance deductible and certain qualified medical expenses like dental and vision care. There are also tax advantages to an HSA because funds contributed are not subject to federal income tax at the time of the deposit.
A handy way to compare a high deductible health plan with an HSA to the traditional route for health care is AARP’s HSA calculator.
We also believe that long-term care insurance is an important part of your health care plan. Long-term care insurance covers basic daily needs over an extended period of time once you’ve lost the ability to do two things on the specified list. It helps with costs not covered by health insurance, Medicare, or Medicaid. This insurance helps families who are unfortunately dealing with a chronic illness for an undetermined period of time like Alzheimer’s. Long-term care is so much cheaper when you’re younger.
Healthcare is expensive, but your loved one’s life is priceless so do the research to see if you can find ways to save some money. Some seasons of life you just can’t adjust, but maybe it’s time for you to shop around for some other health insurance options.
3. Health issues are cheaper and easier to treat in the early stages.
The earlier you catch most conditions, the cheaper it will be to treat AND with less aggressive treatments.
While some of you may be a slight hypochondriac, going to the doctor for the smallest things (that hangnail will heal), don’t swing too far the other way either. Do not wait until you are seriously ill to see a professional. A hospital stay for pneumonia is so much more expensive than a round of antibiotics before your illness gets too bad.
Make sure you’re staying current with preventive screenings too. Don’t wait to take care of yourself.
4. Don’t avoid those bills. Be proactive.
Finally, don’t avoid those ugly bills. Sit down, take a deep breath, and figure out some next steps.
We would recommend you call the different providers sending the bills and discuss payment arrangements. They don’t want you to get behind on your bills. They would like their money, but maybe the monthly amount they have calculated on the statement just won’t work for you right now. Arrange a workable payment schedule and then stay on top of it.
Try not to let the envelopes pile up, unopened. Sometimes you are incorrectly billed or double-billed by accident. Make sure you open every bill, then call and check on any bill you think might not be correct.
The illness is painful enough it’s unfortunate that it has to be so expensive. But you can get through this day-by-day just like walking through an illness step by step.
We wish you the best of health and happiness in the future. Hug those close to you just a little tighter today.
Hugs to you.
Taylor & Megan Kovar