Frequently I meet with clients who are struggling with medical bills. As a financial counselor, my number one goal is to congratulate them on taking the first step! Calling is a tough challenge. The number one fear I hear from clients is, “I was scared of being judged.” Here is what I tell them. “You’re in control. I am here to help you, not take over. I will provide you with a plan and guideance so you can take charge of this. You can do this!”
This year I met with a single father with one child who works full time and has insurance through his employer. Besides his premium of $200 per month (or $100 per paycheck), his plan has a deductible for each person covered ($1250). Once he reaches his deductible he then splits the cost with the insurance company (usually called co-insurance). In his case this split is 70/30: meaning the insurance company pays 70% of the cost of a medical service and he pays 30%. He has to pay this up to $4000 for each person on his plan, or a maximum of $8,000 per family. He makes around $40,000 per year so each year he is faced with the potential of having to pay out 26% of his gross income towards medical costs (this includes premiums and “out-of-pocket” costs, but no limit on prescription costs). That’s a pretty daunting number.
Unfortunately, this is the only plan he is offered through his employer: his only other choices are to try to find affordable coverage in the private market (which is unlikely: the average deductible in the private market is around $10,000 per year), or go without insurance. Because his son has behavioral health issues he has had to pay out about $6,000 in medical bills (not including premiums or prescriptions), each year for the past 3 years. He has never been able to build reserves to cover this, and even though he utilizes his Flex Spending Account (FSA) for health care costs each year, it maxes out at $2500, per federal regulations. He can see no end to his compounding medical bills, without changing jobs or taking on more work: option that may make his situation better in the long run, but compound his level of stress. Who will watch his son if he is working two jobs? He needs balance and hasn’t been able find it.
Maybe you can relate to this situation. Maybe you wish you had it is as “good” as this guy does…hey; at least he has a job! And insurance! And compared to many insurance products on the private market, his deductibles and out-of-pocket costs can seem pretty low. The impact of high out-of-pocket costs can be financially devastating for anyone who is, or has a family member who is struggling with on-going health issues be they physical or mental health issues. What can a person do?
Avoid surprises: Learn the details of your insurance plan
Open enrollment happens every year in the fall for most people. If your employer offers you different plans research the pros and cons of each plan. Talk with your benefits department about the potential out of pocket costs for a worst case scenario. Ask about any awards programs to reduce any of your costs. Try your best to estimate what you think your medical costs will be in the next year. Use your FSA to reduce your taxable income – you are reimbursed for costs you will have to pay anyway.
Bottom line: If you don’t understand how your insurance policy works, ask questions until you do. If you don’t know what questions to ask seek the advice of someone who does.
The last thing you want is huge medical bill because you didn’t understand what you were signing up for.
Communicate with your insurance provider
Too often people do not check with their insurance provider to make sure that services will be covered. This is not the case in the story given above, but it does happen frequently. If you see a doctor or specialist out of your insurance network, or obtain treatment that is not covered by your policy, you could be left with tremendous medical bills. Before you see a doctor, have a procedure done, or take part in any treatment program, make sure you know what is and is not covered under your policy.
One other note: billing mistakes are very common in the medical field. Don’t just assume that a medical bill is correct.
If you feel you are being billed for something incorrectly investigate it. Call your insurance company and ask about the billing. It could be your service was coded incorrectly. Call the doctor’s office and ask about the bill. Follow up and you may end up with a lower bill, or no bill altogether!
Communicate with the billing department at your clinic or hospital
If you get a large medical bill what can you do about it? If you have a low-to-moderate income and the bill is for a hospital stay, call the billing department and ask about Charity Care (also called Community Care or Financial Assistance). You may receive an application automatically in the mail with a bill. Each health provider is going to have their own process for looking at this, but since you could be looking at 100% of your out-of-pocket costs being forgiven, it is well worth any paper work you may need to complete. Some clinics have financial assistance programs as well. If you have a bill you can’t pay, call your medical provider right away.
Research community resources
Even if you have insurance, if you have a child with special needs there may be programs in your community, county, or through your state’s health programs to help you out. The father in my story above applied for these services and was approved. Not only will the program help him out with many of his out-of-pocket costs, but he has been connected with a case manager and a social worker who are helping him navigate the system to get connected with supported services for his son, including respite care so he can take break once in a while as well.
Budget carefully and make affordable repayment plans
Sometimes despite all your best efforts you may end up with a large medical bill that you have no option but to pay. If this is the case you will need to make an affordable repayment plan. Most providers will want a payment that will pay off the bill in 10 months (or a 10% payment). If this is not affordable they may be willing to work with you. Before you contact the medical provider’s billing office, sit down and figure out what your monthly expenses are: list all of your bills; how much you spend on groceries, gas, household items, pet expenses; and any other expenses you may have. Is there money left to pay on those medical bills? If not, you may need to consider areas to cut back (less dining out? reduce or cut out cable? or your cell phone plan?). If you have already cut all you can and still can’t afford a payment plan you may need to work a second job temporarily.
This is a tough challenge. I really encourage you to take the first step and call LSS. We constantly hear from our clients that the simple act of calling and setting up an appointment helped lessen their fear and gave them encouragement. Still hesitant. Check out what our clients are saying.
You are not alone. We’re here to help, not take over.
We can meet in person, over the phone or even online and help provide you with a plan and guidance so you can take charge of your life again.
CALL 888.577.2227 OR VISIT ConquerYourDebt.org. Find peace of mind from working with a trusted leader.
Author Shannon Doyle is a Certified Consumer Credit Counselor at LSS.