5 Great Tips to Avoid Medical Debt

Elderly man contemplates medical debt

Medical debt is not just the leading cause of personal bankruptcy in the US; it’s more common than all other causes combined. 2 out of every 3 bankruptcies are caused by medical debt. It could happen to anybody – nobody gets to choose when they get sick. It may seem like all hope is lost and bankruptcy is just around the corner. But fear not! Apollo Insurance Group is here to help with 5 great tips to avoid medical debt.

1. Get health insurance

Duh. This one may seem obvious, but there are still millions of people that are uninsured in the United States. Studies from United Healthcare show that 63% of Americans have under $1,000 in their bank account to cover sudden medical costs. Federal subsidies mean that most people can find health insurance for little to no cost to themselves. Most uninsured people think that they can’t afford to get insured, but the opposite is true – they can’t afford NOT to be insured!

Getting insured is the biggest step someone can take to avoid medical debt, but it’s not the only step. They also need to find a plan that covers their needs. Which brings us to:

2. Learn about your providers & costs

Insurance plans, doctors, and hospitals all have something in common: they have very little in common. Every hospital has its own prices for different procedures. Every doctor has their preferred drug options. Every insurance company has their preferred providers.

If your insurance is covered under a PPO (Preferred Provider Organization) plan, then that last point is especially important for you to consider. Costs in-network and out-of-network can vary DRASTICALLY with different insurance plans. You should always know who your in-network doctors and pharmacies are and use them whenever you can. Even within the network, though, prices can vary. When you know you have a major procedure coming, shop around the different locations; you never know where you may find the best deal.      

3. Prepare for Medical Bills

Just because you don’t have any medical procedures on the horizon doesn’t mean you shouldn’t be preparing for them. You do NOT want to wait until your appendix bursts to learn your insurance provider’s stance on appendectomies. So, read your insurance policy thoroughly. See what it covers and, importantly, what it doesn’t. If it helps, then write the details down. If an emergency happens, then you won’t be surprised by any unexpected bills.

It’s equally important to start building an emergency fund that can cover the maximum out-of-pocket costs for your insurance plan. The max out-of-pocket is the most you could be asked to pay for medical bills in a calendar year before your insurance covers the rest. There are a lot of procedures that are so expensive that they can put you to your maximum out-of-pocket all on their own. So, you need to be prepared to pay that amount at any point. Create an emergency fund and set that money aside until it’s necessary.

4. Pay your bills

Just because you get your bills doesn’t mean that your job is done. There is financial assistance out there for people that need help with their medical bills. Government programs like Medicaid and Medicare exist to help low income and/or elderly people with their medical bills. Additionally, there are tons of charities and non-profit organizations that exist solely to help pay for medical expenses. The patient services department of the hospital that performed your procedure can help you contact these organizations.

Even if you don’t qualify for any financial assistance, you can still negotiate the bill. Ask to speak to someone in the billing department that will be able to cut you a deal. If you can afford it, then offering to pay up front in cash can result in savings of up to 20%. Alternatively, the hospital will almost certainly have payment plans available. Always speak to someone about the best way you can pay your bills.  

5. Accident/Critical Illness Gap Plans

These types of health insurance aren’t as widespread as total coverage, but they are extremely important for the people that need them. Gap plans offer lump sum cash payments in the event of an accident, a critical illness, etc. Combined, these cover 93% of the reason that most people reach their maximum out-of-pocket costs for the insurance. If someone’s deductible or max out-of-pocket is too high for them to cover, then a gap plan could be the difference maker for them.

Apollo Insurance Group Can Help

If you’re worried about the threat of medical debt, then reach out to one of the brokers at Apollo Insurance Group. We can help you plan for your health future and avoid the most common cause of bankruptcy.

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