Medical expenses are the largest cause of bankruptcy in the U.S., and according to a study done by Harvard University, medical debt accounts for 62 percent of all personal bankruptcies. One of the most shocking things about this statistic is that the majority of people who file for bankruptcy due to medical debt had some form of health insurance—this just goes to show that uninsured people are not the only ones affected by these bills.
Due to higher medical expenses and fluctuations in insurance coverage, many families are forced to max out credit cards and chip away at their savings or retirement accounts, and once these funds have been wiped out, the only option left may be bankruptcy.
An illness or medical emergency shouldn’t have to become a financial nightmare or lead to so many financial sacrifices. With the right resources and information, there are ways you can deal with your medical bills effectively to prevent yourself from falling into medical bankruptcy.
Tips to Avoid Medical Bankruptcy
- Don’t ignore your bills.
You may be overwhelmed by the incoming medical bills, but don’t throw them under the rug. It’s important to notify hospitals, health providers and insurers if you think a payment might be late or if you’d like to set up a payment plan. Paying a portion of your bill, even if it’s a small amount, is still better than making no payment at all. If you do not have the funds available to make your payments on time, ask about financial assistance programs that may be available to you.
- Pay attention to your bills.
It’s important to always ask for an itemized statement to look for billing errors. These are extremely common and could end up costing you thousands if you don’t pay attention to every detail. Also, make sure that any payments from your insurance company have been applied to your bill. If you have questions about your bills, don’t be afraid to call your medical provider and ask.
- Don’t use credit cards.
If possible, you should try to avoid using credit cards to pay for your medical expenses due to the high fees and interest rates. If you’re admitted to the hospital and your only form of payment is a credit card, don’t use it. The hospital cannot deny you medical treatment (it’s illegal to do so) and you can work out an alternative form of payment with the hospital or your healthcare provider, rather that maxing out your credit cards and spiraling further into debt.
- Negotiate a lower rate.
This may seem like a daunting task, but it’s certainly one that’s well worth it if it works in your favor. Call the billing office for your health provider and ask if they’d accept a lower rate for your care. Your calls may not be returned right away or you may hear “no” a few times, so try calling back again or ask to talk to a supervisor instead. If your negotiation is successful, it’s important that you stick to the plan and not falter on payments or you may be stuck with the full amount again.
- Acquire health insurance.
Yes, many bankruptcies filed due to medical bills may be for people who are insured, but the majority of these bankruptcy filings are for people who are uninsured or have inadequate coverage. It may seem costly to purchase health insurance, but in the long run you really can’t afford not to have it. Shop around until you can find the best rate and coverage to fit your needs, and if you have a limited income, you may even be eligible for a state program or a discount on your insurance plan.
- Crowdfund to pay your medical bills.
Crowdfunding has proven to be a very effective way to raise funds quickly from family, friends or even strangers that want to show their support. Creating an online fundraiser gives you an outlet to tell your story to the world, easily share your campaign via social media networks, raise the needed funds to ease your stress and worry, and ultimately help you from falling into medical debt.
We hope these tips will help you stay on the right track and steer clear of medical bankruptcy. If you or a loved one happens to be in need of help to alleviate the financial burden caused by medical bills, you can create a free fundraiser now and start raising money today.