By: Christopher Wolfington
Medical debt is the number one reason for personal bankruptcy in the United States. Nearly 2 million people were affected by bankruptcies in 2017, according to a CNBC report. A poll done by the Kaiser Family Foundation and The New York Times found once someone has problems paying a bill, insurance coverage doesn’t make a big difference in the struggles they will face. These struggles cause Americans to curb spending on essentials like household purchases to basic items and even dip into savings to pay off debts. Here are four ways to avoid medical bankruptcy and eradicate any future problems such as these.
- Know Your Health Insurance
Understanding your health insurance inside and out is imperative. Whether it’s short-term, long-term, life or health, memorizing your policies and researching the rules prior to doctor visits can keep your bills significantly lower. Make sure your policy suits your need and budget to avoid extra costs.
- Build an Emergency Fund
Building an emergency fund to cover potential financial loss allows you to have a financial safety net and instills confidence that any costs can be covered no matter the circumstance. Unexpected life events can happen and majorly impact funds, so having money stored away can help
- Only pay what you owe
“60% to 80% of medical bills have errors,” according to Sarah O’Leary, Founder and CEO of ExHale Healthcare Advocates. Looking over your Explanation of Benefits form and understanding your policies helps eliminate billing code errors, over/under balance areas or hidden fees.
- Negotiate the Bill/Payment Plan
The last thing anyone wants it to get a bill they can’t afford. The moment you realize your bill is too high or you can’t afford your current policy, contact the provider directly and see if you can set up a payment plan. A payment plan helps avoid patient bankruptcy or debt.