Tips for Managing Medical Debt
Friday, August 17, 2018, 6:00 PM | Leave Comment
Most of the time, medical debt comes as a pretty big surprise to the patient. It’s something that’s relatively hard to anticipate, since most of the time, large medical bills are due to emergency visits to the hospital.
When an unprecedented bill comes in, you end up with an upset budget and no plan to pay off this newfound debt.
More than half of bankruptcies every year are due to medical debt. If you’ve found yourself in a tough situation with medical bills you don’t think you’ll ever be able to pay, here are a few tips to help you manage your medical debt and avoid bankruptcy.
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Talk to your medical provider
Communication can be huge in getting your debt under control. A lot of people avoid talking about their medical debt because they feel embarrassed talking about money.
Keep in mind, medical billing departments talk to people like you, who can’t afford their medical bills, every single day. There is nothing to be embarrassed about.
Call your provider, and explain your situation with them. That you’re drowning, can’t make your payments, and that other areas of your life are suffering. In most cases, they’ll be sensitive to your situation, and can help you get your balance lowered.
To put this into perspective, if you were to file for bankruptcy, the hospital wouldn’t get any of the money you owe. It’s in their best interest to help you manage your payments.
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Carefully consider the situation before paying for your medical debt with a credit card
A lot of people automatically reach for their credit card to make payments towards their medical debt. This doesn’t get rid of the debt, though, it just moves it to a different place.
Unless the medical debt will take up less than 30% of your available credit, it is a better idea to call your medical provider and work out a payment plan with them. This way you don’t’ accrue interest, and it won’t affect your credit score like putting the debt onto your credit card would.
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Make sure you pay on time
If you’re having a hard time staying above water, this may seem like a horrible tip. How can you pay on time if you don’t have the money to pay on time?
If you miss a few payments in a row, though, your bill will be spent to collections. Often, you won’t get a notice from your medical provider that the bill is getting sent to collections, so it’s your responsibility to manage this and stay on top of it.
Put a reminder in your calendar so you know when your bill is due. If your payment is going to be late, call your medical provider and let them know.
You can also always ask to have your monthly payment decreased. You’ll have to pay longer, but it won’t be as large of a bill every month.
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Claim your medical debt on your yearly taxes
Something a lot of people don’t realize, is that if a considerable portion of your income goes to paying off medical debt, you can get a tax deduction for it.
If your medical debt exceeds 7.5% of your annual income, you can deduct this from your taxes and potentially get a larger tax return this coming year. It won’t help the financial situation that you’re struggling with right now, but it will help you next year.
So, do a little math and see whether or not you’ll be able to take advantage of this.
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Call your insurance company
Your insurance company will try to pass as much of the debt over to you as possible, to avoid paying for the medical bill.
Make sure you understand your benefits and deductibles, and give them a call. Be prepared to be on the phone for a while, and make sure you understand the total amount of your bill, as well as a summary of you benefits.
Clear up mistakes before it affects you and you end up paying for it.
Throw us a like at Facebook.com/doable.financeThis article is written By Aurora McCausland.
