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Controlling Your Finances When You Get Hit with Medical Bills

Posted on July 24, 2019

Whether it’s a planned procedure or an unexpected incident, medical bills can hit your finances hard. If you don’t have health insurance, a trip to the emergency room could cost up to $3,000, and if you are admitted to the hospital, you can expect to pay a whole lot more. The average hospital stay is around $10,000, and that doesn’t include needing surgery or specific treatments.

If you do end up having to go to the hospital, or find yourself buried by medical bills, it’s important to be ready to take control of your finances and have a plan for handling your newly acquired debt. Here are some things to keep in mind to prevent medical costs from taking over your life and ruining everything you’ve worked for.

Understand What Your Insurance Covers and What It Won’t

doctor showing a website to a personIf you have health insurance, you need to know what it will cover and what you’ll need to pay yourself. According to a recent survey, 41 percent of Americans don’t understand how their health insurance plan works or what is covered. If that percentage includes you, it’s time to start learning about insurance, specifically your plan.

First, you’ll need an understanding of how health insurance works in general. There are a few terms you need to be familiar with before you start looking into your personal health insurance plan.

  • Monthly Premium - This is what you pay every month for the insurance plan. If your plan is through your employer, this is pulled directly from your paycheck.
  • A deductible - This is what you have to pay before your insurance will start covering costs.
  • Co-Pay - Even if you’ve hit your deductible, you will still need to pay a little bit anytime you see a doctor or visit a hospital. Co-pays are typically around $25 to $50.
  • Co-Insurance - Some plans have no deductible, but instead require you to pay a percentage of every expense.
  • Out-of-pocket - This term commonly refers to any costs you are expected to pay, including deductibles and co-pays.

Once you feel comfortable with insurance as a whole, it’s time to understand what your specific plan is. Find out what healthcare providers are in your “network,” meaning they accept your insurance, what types of healthcare are covered by the insurance, and what your current deductible is.

By understanding what your insurance covers and requires from you, you can start to plan out future medical expenses and what you need to cover. If you have a high deductible, it’s worth saving up in case you need to pay it all out in one expense.

Pioneer also offers additional coverage and protection to our members through supplemental insurance and a Health Savings Account. With an Hospital Accident Plan, you can get quick payment if you end up in the hospital because of an accident.

If you plan ahead of time, you can save up money solely to help with medical costs with a Pioneer Health Savings Account. Many employers also offer HSA options alongside health insurance, but if you don't have one, the option to open one is available to Pioneer members.

Keep Track of all Medical Bills You Receive and Follow Up on Them

man looking at his laptop with a spreadsheet openAnother point of confusion with medical expenses comes from the bills themselves. Commonly, you’ll get a bill in the mail that your insurance will cover, but says you have to pay it. On the flip side, you might get a bill saying you’re overdue on something that you’ve already paid.

It’s incredibly important to keep track of all your bills and keep receipts/evidence of what you’ve paid. It’s estimated that 80% of all medical bills contain errors, which can result in insurance declining paying a bill, which then gets sent to you, even though you shouldn’t have to pay it. Similarly, you might pay a bill, only for it to come back again because of a mistake.

Keep track of what you’ve paid, what the insurance should pay, and don’t be afraid to push back on mistakes.

Consolidate Medical Debt Into One Place

doctors staying in a hospital hallwayIf you do find yourself unable to pay for your medical costs from your savings, you’ll need to go into debt so you can eventually pay it off. Hospital billing departments often offer plans to help pay off your debt overtime, which include interest rates and minimum payments.

But just because you agree to a specific plan doesn’t mean you are stuck with it. If you have multiple sources of medical debt, consolidating it into one loan can save you a lot of headaches and maybe even some money.

For example, if you utilize Pioneer’s Signature Loan or something similar, you can keep all of your expenses and payments in one place and potentially save money. Rather than sending a dozen payments to different places, you only need to worry about one payment every month with a single interest rate.

Ask for Financial Guidance

Every person’s situation is unique, and there is no one size fits all when it comes to paying off medical debt. But you don’t have to do it alone.

Pioneer members have free access to financial counseling through GreenPath financial wellness. Their trained counselors can assist you with organizing your budget, make a plan for your debts, and even help you negotiate your debts to decrease interest rates or lower monthly payments. Learn more about how GreenPath can help you with your medical debts and financial wellness as a whole.

Learn More about GreenPath!


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