Managing and Avoiding Medical Debt

As more workers lose their jobs, the issue of health insurance and how to pay for medical bills becomes one other stress to add to the condition of a worsening economy. It is a situation those without medical insurance know all too well.

If you find yourself out of work without medical insurance, you may find yourself in unfamiliar territory not knowing what to do. But there are some simple things to remember if you find yourself in such a place. Make the right decisions now so that you are not paying for missteps years from today.

Credit: There are credit cards out there specifically for people who need access to large amounts of credit/money for hospital and/or doctor bills. However, the same problems associated with regular credit cards come with these medical credit card bills.

The main reason why you may want to avoid a credit card is because you are wracking up additional debt that will accrue interest. If you carry a balance with a hospital, you will not be charged interest. It is just debt that sits there. So, you might as well pay off a fixed balance rather than one that continues to grow as long as it is in existence.

Additionally, if you hold a medical credit card, it could affect your eligibility for aid such as Medicaid, because your debt on the credit card would not qualify as actual "debt."

Know Thy Bill: When you receive a bill from a hospital or doctor, look it over! Sometimes there will be mistakes, and if you are sharp enough to catch them, it could mean rightful savings for you.

Common errors include mistakes on co-pay amounts and drug costs (pricing or quantity charged for). Also make sure that you are being charged for the appropriate medication or procedure.

Negotiate: Let's say you are facing a very high hospital bill. You are stressed about how you are going to pay down this debt. Think about negotiating a payment plan with the hospital. Hospitals are businesses just like any other out there, and they want to collect their money just like any other business.

In some cases, you may be able to negotiate a payment plan with the hospital that includes smaller payments.

If you are able to negotiate a plan that works for you, make sure to know and understand the terms so that you are not setting yourself up for additional stress later on down the line.

Communication: Good communication is key to getting medical debt paid down. If you don't understand something about a plan, then ask before you agree to a payment plan.

Additionally, once you have entered into a plan, keep the communication line between yourself and the hospital open. Always make sure to pay something and don't ignore your bills.

Documentation: If you are facing a steep hospital bill and are finding yourself constantly on the phone with multiple people from the hospital, document every time you are on the phone. Take down people's names, titles and contact information. Make sure to also record the date and time that you spoke with this person and what specifically was discussed. These notes may come in handy in the event you have to backtrack and prove that you were promised something that someone is now saying was never promised to you.

Attorneys: If you really feel in over your head, it may be time to get an attorney who could give you advice on dealing with your debt. Don't look at this as means of squirreling out of paying your bill. Rather, look at it as a move to understanding what you can do to resolve your debt in a manageable way. Oftentimes, people are quick to jump to bankruptcy as the solution to their problems. However, this should be viewed as the ultimate last resort to take. And if someone is telling you to file for bankruptcy right off the bat, they may not be giving you the most sound advice. Always consult multiple sources before making such a decision.