Unexpected medical bills can turn lives upside down—with or without health insurance. Figuring out how to pay for expenses resulting from accidents, illnesses and hospitalizations is often stressful and frightening because we all know the potentially harmful financial implications are real and staggering.
A National Health Interview Survey found:
- 1 in 3 persons was in a family experiencing financial burden of medical care
- 1 in 5 was in a family having problems paying medical bills
- 1 in 4 was in a family paying medical bills over time
- 1 in 10 was in a family that had medical bills they were unable to pay at all
Medical bills were responsible for 62 percent, according to a Harvard study, which also found that most medical debtors were well-educated and middle class, and three quarters of them had health insurance.
Planning ahead and including a strategy for paying for unexpected medical bills in your overall health care budget can be immensely helpful. Being proactive, rather than reactive, will typically save you money and make a challenging time a little less difficult. You may find one of the following three options—or some combination thereof—will be helpful in containing costs.
1. Medical bill negotiation
If you have the time, which may not be the case with an accident or medical emergency, shopping around for a specific treatment, procedure or service is one way to find the best rate for medical care. Another strategy is to learn the cost up front and ask to work out a monthly payment plan with the provider.
If you have health insurance, find out if your plan covers the care you are to receive and at what dollar amount or percentage. Make sure the providers you see and the clinic or hospital where you will see them are covered.
Ask for an itemized bill for medical services, and double-check it for mistakes. If you have any questions, be sure to contact the billing department for the service provider and discuss them. As many as 8 in 10 bills for health care services contain errors, according to a 2013 Time magazine article citing Medical Billing Advocates of America. Medical-billing advocates such as those trained by MBAA can help analyze your medical bills and insurance payments; search for potential mistakes or overcharges; and negotiate appeals, denials and lower payments.
2. Critical illness insurance
Keeping medical bills manageable can also be a matter of taking out additional coverage such as critical illness insurance, which pays a lump-sum cash benefit upon diagnosis of a covered medical condition. After all, medical bills are only part of the financial strain caused by accidents and unexpected illnesses. Additional time off from work, increased childcare needs, higher spending on fuel or other travel expenses, and out-of-network care may all come into play. Critical illness plan benefits may be applied to all of these costs incurred and may also be used toward your health insurance deductible and out-of-pocket costs, to purchase specialty drugs, and to pay for experimental treatment.
Of the top 20 most expensive conditions treated in U.S. hospitals in 2008, five were circulatory diseases including heart attack and stroke, according to the most recent AHRQ statistical brief on this topic.
Diseases often covered by critical illness insurance, which is also known as specified disease insurance, supplemental insurance and limited benefit insurance, include the following:
- Heart attack
- Major organ failure
- Coronary artery bypass
- Severe burn
Like other forms of insurance coverage, critical illness plans may be customized through benefit selection to accommodate your financial and health care needs.
3. Hospital indemnity insurance
Securing a hospital indemnity insurance plan is another way to reduce medical bills and pick up where your medical insurance leaves off. If you anticipate needing hospital or surgical services, this type of plan can provide some financial relief at a budget-friendly rate.
Considered supplemental coverage, hospital indemnity plans do not provide catastrophic coverage but do provide first-dollar fixed benefits for medical expenses related to hospitalization, surgery and outpatient therapy services. Plan benefits often include hospital room and board, intensive care, physician visits during hospital confinement, surgeons, assistant surgeons, anesthesiologists, chemotherapy and radiation therapy, and physical therapy, to name a few.
Monthly premiums are relatively low for hospital indemnity plans, which are highly customizable. You can select a per injury or illness deductible as well as the benefit levels that best fit your needs.