Debt Free

Even with health insurance, you can be financially devastated by medical bills. It doesn't take much, either. A relatively minor problem or accident can cause you to be hospitalized for a day or two, and could hit your savings account for $10,000 - $20,000. Recently my wife had double pneumonia and spent 6 hours in the emergency room. The cost was almost $7,000! Even with good medical insurance, you can easily to face thousands of dollars in out of pocket medical expenses. If you also have to take some time off work due to your own, or family member's medical problems, you could be really facing a financial emergency.

What can you do if you need help paying medical bills? Well, there are some places you can find help and some ways you may be able to reduce your medical bills. First of all, there are some things you should not do in this situation. If you have mounting medical bills, do not try and avoid them. They are like any other outstanding debt, and will not go away on their own, like so many puffs of smoke. They will negatively impact your credit rating and will be reported as an outstanding debt on your credit report. Some people are under the mistake assumption that medical expenses aren't going to hurt their credit, but this is just not the case. In fact, about 80% of bankruptcies in the U.S. are due to medical expenses.

If at all possible, you don't want to file bankruptcy die to medical expenses, however. On top of the social stigma, it will stay on your credit report, just like any other bankruptcy. Future employers and potential creditors will see it just as if you'd gone on a spending binge you couldn't afford. In most cases you should not get a standard debt consolidation loan to pay off medical debt, either. You could lose your home by doing so. In addition, you'll start paying interest on your medical bills, something your weren't doing in most cases.

If you need help paying medical bills, you should contact your creditors. Almost all hospitals and doctor's organizations will allow you to set up a payment plan. Many will allow you to pay minimal monthly payments with little or no interest. You should definitely avail yourself of such a plan if one is offered by your medical creditor. You won't know about one however if you don't ask. Hospitals have an office of patient relations or patient finances. Go meet with the representative and discuss your debt.

In addition to a payment plan, many hospitals will forgive a substantial portion of your debt if you contact them before things get out of hand. You can easily get 25% - 75% of your medical bills waived. This is usually income dependent, but you can make a hardship case that will get you a further reduction. Almost all medical facilities will offer this. (If you got male enhancement surgery or a hair transplant, you're probably out of luck.) They will usually let you list any financial hardship you have recently suffered and will take them into account when figuring your forgiveness. They will be much less likely to do this if you wait until your bills go to collection. In fact, by then it's most likely too late, so act sooner, rather than later. Usually, doctor's associations aren't as likely to offer such programs. Medical school loans have to be paid, you know. Sometimes the doctor's school loan payment is bigger than your mortgage. It doesn't hurt to ask, however.

Before you take the trip down there for your meeting, look over every bill you received for accuracy. It is all too common for medical bills to be chock full of errors. You may be overcharged for procedures and medications you received, or charged for those you did not. Both situations are unfortunately all too common when dealing with medical bills. Be prepared for some long nights. Medical bills are notoriously difficult to understand, and there may be hundreds of line items to go over. This step is essential to prevent being overcharged, however. You'll probably want to contact the medical facility or doctors office and find out what exactly some of the items are.

The next step is talk to your insurance company if there are any portions of the bill you think should have been covered. In some cases you'll be able to get them to pick up the tab for things they originally didn't. Even if they didn't pay for certain items, you should be sure you should have to pay them. In some cases there are procedures and medications that you cannot be billed for, or the bill was submitted too late. You insurance company will be able to determine such things. So, even if you were denied by the insurance company, check with them to determine if you should be the one writing the check. If the doctor's office submitted their bill to the insurance company late, and it was denied, you should not pay for their mistake.

There are companies that will negotiate for you and also offer consolidation loan services that don't require you to use your house as collateral. This is obviously a far better option than risking your home or, in most cases, declaring bankruptcy. Look for such companies in your state, but check them out carefully before you do business with them.

Hopefully your never find yourself with overwhelming debt due to medical expenses, but if you do, make sure you go through the steps to make sure the debt is valid, then reduce it as much as possible. Once you've taken those steps, it could be a good idea to consolidate it, but only if you are not risking your home, and if the fees you are charged are not excessive. Here's to getting debt free.