If you’re trying to pay off a hefty medical bill, you are not alone. Medical bills are a leading cause of debt in the U.S. Many working Americans don’t have enough savings in place, yet they are facing high deductibles and out-of-pocket expenses.
A report published in 2017 by the Consumer Financial Protection Bureau showed that medical bills were the most common type of past-due bill or payment for which consumers reported being contacted by collections agencies. More than half (59 percent) reported medical costs as the leading reason for being contacted.
Here are six tips on how to deal with a looming bill in a way that is positive and proactive:
Don’t Ignore It
It’s tempting to stick your head in the sand, but this will not make the problem go away. Don’t leave the bills under a pile of papers but address the issue head-on. Establish contact with the medical provider to let them know you are working out the best way to make the payments. Once the bill goes to collections, it will be that much harder to negotiate.
Closely Check the Bill
Spend time reading your bill very closely. It could include mistakes. If you’re unclear about what the costs are describing or think you may have been overcharged, ask for an itemized bill from your provider. If you have health insurance, carefully compare the hospital bill against the summary of benefits from your health insurance company to make sure everything matches up.
Explore a Payment Plan
Most providers offer payment plans, sometimes these include interest and at other times they are interest-free. First work out what you can pay each month. Consult your budget and find out your realistic bandwidth for making monthly payments. When you call the provider, be aware that you can try to negotiate and ask, for example, whether the plan can be interest-free or if you qualify for any discounts. If you organize a payment plan with the provider over the phone, ask for them to send you the confirmed plan in writing. Then once you confirm the details, stick to the plan over the long-term.
Ask About Charity Programs
Many hospitals and medical providers include programs for those whose income is low or who may be moving through very difficult circumstances. Don’t be afraid to ask about whether they offer such a service. The provider will often mail you the application materials for this type of program to see if you qualify. You can also reach out to your state or local government, to find out whether they have assistance programs that may help offset the costs.
Build Up Emergency Savings
Your best defense against these kinds of bills is to have a stellar offense. Create an emergency savings fund to dip into when illness or accidents arise. You will ideally keep this fund in a separate account to the one you use for your daily living costs. Make sure you will be able to access it if you need it. Also be sure to actively replenish the money if you ever dip into it.
Insure Your Income
Those who have experienced an accident or illness that takes them out of work for weeks or months on end, will know the stress of losing your income during this time. Take steps to make sure that if you have an illness or injury, you will be able to earn an income during these times. This is what disability insurance is —it’s insurance for your income and allows a portion of your salary to be paid, while you recover.
It’s no fun to have a large bill you need to pay. However, once you actively resolve the situation and work out an action plan you’ll feel a great deal of relief. That peace of mind will have a big impact on your overall recovery.