Insurance and Credit

Who isn’t struggling to pay off debt these days? Whether it’s credit card bills or student loans, most people seem to be overwhelmed by a flood of debt that never seems to subside. It has been noted that a growing portion of that debt is related to costs associated with medical procedures. A few hours can equal a few thousand dollars of medical debt, which may take a few years to pay off. This struggle with high medical costs has been a leading factor in the rise of America’s divorce rate in the last few decades.

With such a huge problem weighing on the minds of many good people, you might think more practical solutions would be presented. But alas, most advocates of health care reform live in the theoretical and never speak to real-world answers for the here and now. To wit, here are four practical tips for reducing medical bills and avoiding the resulting debt.

1. Shop Price. If you know you have a procedure coming up, it is important to shop around for the best price. A mistake many people make is assuming all doctors or hospitals charge the same. That is simply not the case. You wouldn’t have your garage door repaired without trying to find the best deal. Why should it be any different with a colonoscopy or a breast exam? Another mistake is in assuming that if you have insurance, there is no need to fret with the details of medical billing. Remember that the total bill will affect your out-of-pocket cost, so do yourself a favor and shop around for quality care at the best rate.

2. Get an Itemized Bill. Hospitals make mistakes like any other business. And like any other business, there is always the possibility of the cost of a service being over-inflated. As a matter of practice, most hospitals do not give you an itemized bill automatically, so you must ask for one. This could mean several hundred to several thousand dollars of savings if you catch a mistake or call out a grossly over-stated line item.

3. Watch out for Medical Codes. Every procedure that is billable gets coded using a standard medical coding system for diagnosing and treating medical concerns. Why should you care about these codes? Well, it is best explained with an example. Say you have a history of migraine headaches, and you visit the emergency room complaining of pain in your forehead. Ultimately, you find out it was a sinus issue and you leave. The doctor may code the diagnosis as a sinus headache or possibly a migraine headache, maybe because you mentioned that during the exam. Well, if it was coded as a migraine and your insurance company has that down as a preexisting condition, they will refuse to pay, even though you really just had a sinus headache. If you find one of these mistakes, talk to the doctor or nurse that did the exam. They may recognize the error and resubmit the paperwork.

4. Request a Discount. Everyone knows someone who is either without medical insurance, or is lacking significant medical coverage. For example, securing an independent insurance policy that covers maternity is near impossible these days. But if you find yourself without insurance, you may be eligible for a discount. The cost of filing insurance claims has driven costs higher for doctors and hospitals, and they have responded by increasing the prices you pay. However, in many cases, if you pay them directly and thus absolve them from having to file insurance paperwork, they may cut their prices dramatically. Other discounts may be given for up-front payment or early registration. Do inquire about discounts any time you are facing a significant medical procedure.

Maybe you’re one of the people who are dealing with a mountain of medical debt. The thing is that it doesn’t even have to be a lengthy hospital stay: if you’re uninsured, the shortest trip can land you in serious (financial) trouble. Besides, everybody knows that health issues can turn even the best financial situation totally upside down.

The purpose of a debt consolidation program is two-fold. First of all, they negotiate with your creditors so that, anywhere possible, a portion of your debt is written off and your penalties eliminated, which reduces your overall debt. Secondly, they handle the management side of things if you have several debts, and you only deal with them. This simplifies your life a great deal.

The first thing the debt management company will do is have sort of an evaluating session with you. They will look at your total debt, and go through your budget to see how much you can pay. From that point, they will get in touch with your creditors to work out a payment plan. Since medical debt is unsecured (your doctor or hospital has no collateral to cash when you default), its interest rates are higher, which gives the debt consolidation company some room to negotiate for you and bring it to lower levels.

The two parties (the debt collection agency and your creditors) will have a few negotiating rounds before they reach an agreement. Once that’s out of the way, the debt consolidation company will turn back to you and tell you what your exact monthly payment will be, and of course you will be sending that payment to them, and they will make sure the creditors get paid. Their knowledge and skill level often allows them to get great deals for their clients, who probably wouldn’t know how to successfully negotiate them.

Getting monthly installments that you are actually able to meet is probably the most important factor of success for a medical debt consolidation program. When you start making those regular payments, you’ll also find out that it helps your credit score go back up. A legitimate debt consolidation company can be instrumental when it comes to handling your medical debt and finally getting rid of it.

The biggest advantages of medical bill consolidation programs is that you get some of your debt forgiven, which translates into lower monthly payments, and you only have to deal with one company instead of several. It’s probably not something that everyone would feel comfortable doing, but if well-executed, it can help you get rid of a burdensome medical debt load.