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How to Protect Your Finances from Big Medical Bills

It's no secret that the cost of health care in the United States is beyond the means of many Americans. In fact, as of 2003, medical bills were the second most common contributing factor to consumer bankruptcy filings. Later studies suggest that as many as 27% of bankruptcy filings are caused primarily by medical bills, with an additional 36% of cases having medical debt existing alongside serious credit card debt.

But there are steps you can take to protect your finances from exorbitant medical bills. Read on for details.

Know What You're Facing

Whether or not you have health insurance, medical debt can add up. To make sure it doesn't take you by surprise, always ask ahead of time how much a procedure or a hospital stay will cost (emergency situations, obviously, are exceptions). Throughout the payment process, it's important to stay on top of things:

• Hospitals: ask for an itemized receipt for any procedure or stay. Analyze it to make sure it's correct - point out any mistakes and ask for clarification on items you find confusing. Make sure you aren't charged for services you never received.
• Payment and Negotiation: Throwing away medical bills won't eliminate your debt. If you're struggling to pay, contact your care provider to negotiate different terms. If you don't act quickly enough, your bill will probably be sent to collectors, who will be unlikely to negotiate with you.

For the Insured

Studies have found that, unfortunately, even those with health insurance can be pushed to filing bankruptcy because of unmanageable medical bills. If you have medical insurance, there are steps you can take to minimize the likelihood that your bills will get out of control.

1. Before getting a procedure or staying in a hospital, contact your insurance provider and ask if the procedure is covered in your plan. Also ask whether you need to get pre-approval for it to be covered. This can save you from the shock of receiving a whopping bill for a procedure you thought fell under your coverage.
2. Ask your insurer about deductibles involved in your procedure, maximum out-of-pocket costs you'll be responsible for, and whether your doctor/hospital/clinic falls under your network of coverage. Out-of-network care providers are generally more expensive, so consider a switch if yours isn't "in."
3. Most hospitals have financial counselors on hand to help you understand your payment obligations and options. Be sure to meet with one to figure out where you stand.

For the Uninsured

As those without medical insurance know, the least doctor's visit can touch off a series of unwieldy medical bills. But if you simply can't afford insurance, you may qualify for aid from various programs offered by the government and private institutions. Consider the following.

1. Investigate discount policies. Some health care facilities offer discounts to patients without medical insurance. Others offer discounts for on-time payments. Do some research and see what you can find.
2. If you meet certain income level criteria, you may qualify for government-sponsored protection. Talk to someone from the hospital's business office to determine whether Uncle Sam will be able to foot your bill.
3. Some facilities offer free care to those who don't qualify for government programs but still can't afford health insurance. Ask your doctor or at a hospital about local medical resources for low-income patients.

When Bankruptcy Is An Option

Sometimes, medical emergencies and prolonged illnesses are financially overwhelming, no matter what steps you take to minimize costs. Those who cannot afford to pay medical debts may find relief by filing bankruptcy. For more information about filing bankruptcy, we can connect you with a bankruptcy lawyer for a free consultation.

Related Pages

• How to Fight Medical Identity Theft
• How to Eliminate Debt