7 Steps to Plan for Medical Bills
Last week, we talked about the challenge that paying medical bills poses to many people, including those who have health insurance. Although they may not want to think about it, no one is exempt from facing high medical costs someday. With a little planning, however, you may be able to alleviate the burden of high medical bills in the event of a medical emergency or crisis.
Take It One Step at a Time
1. Check your insurance status.
- If you do not have insurance, immediately begin researching the best insurance options for you. If your employer offers health insurance, ask your HR department about your options. If your employer does not offer insurance, you can either purchase insurance through a private exchange, directly from an insurer, or through an Affordable Care Act marketplace.
- If you do have insurance, examine your plan. What are your deductibles and out-of-pocket maximums for both in-network and out-of-network providers? What procedures and medications does your plan cover, and to what extent?
2. Research supplemental insurance options.
Supplemental insurance plans help cover some out-of-pocket expenses for medical procedures. They operate by paying out benefits either in a lump sum, or periodically according to a defined schedule. While regular health insurance plans tend to be broad and general, supplemental insurance plans tend to be specific to one particular area of coverage or type of procedure. Some different types of plans include
- Critical care insurance: coverage for cancer, strokes, heart attacks, etc.
- Accident insurance: a lump-sum payout to help cover medical expenses due to an accident
- Hospital indemnity: coverage for any hospital stay
- Disability insurance: provides a portion of your income in the event of an illness or injury
- And more, depending on the supplemental insurance company
3. Build an emergency fund.
Figure out your month-to-month barebones expenses for things like rent or mortgage payments, utility bills, food, and loan payments. Your emergency fund should contain enough money to cover these expenses for three months, but more is better. While it may seem daunting, an emergency fund is possible through financial discipline and putting just a little aside each month. For some tips on building an emergency fund, check out this article from Forbes.
4. Build a medical expenses fund.
If you have a high-deductible plan, you may qualify for Health Savings Account (HSA). This is a special type of savings account that allows you to set aside money pre-tax to pay for qualified medical expenses. Even if you don’t qualify for an HSA, it is still wise to set aside money each month to save for future medical expenses.
5. Make a battle plan for medical crises.
Last week, we mentioned the non-medical expenses, like food and transportation, that can add up during a medical emergency. Minimize those expenses now by creating a strategy to handle them.
- In order to reduce the amount you would spend on restaurants or take-out, can you stock up on quick and nutritious meals? Consider things like signing up for a meal delivery service, buying or cooking freezer meals, and keeping a supply of canned soups on hand.
- If you have kids, think about what you will do for babysitting. Do you have any friends or relatives who either live nearby or could travel to your house to watch your children? If you don’t, research affordable and quality licensed day-cares and after-school programs.
6. Research organizations that offer assistance during a medical crisis.
As mentioned in our last post, there are many non-profit organizations that exist to relieve the burden of medical expenses. Some organizations include the Patient Advocate Foundation, The Leukemia & Lymphoma Society’s Co-Pay Assistance Program, United Way, the American Kidney Fund, and the American Cancer Society. Know how to apply and what you need to apply so you can obtain and prepare all of the required documents.
7. Make your health a priority.
While it may not help you avoid a medical crisis, taking preventative measures will keep your healthier and reduce your medical expenses. Exercise regularly. Eat a healthy, nutritious diet. Keep your stress levels low. See your primary care physician for an annual exam so you can catch health issues before they become critical. These small actions can add up to a healthier lifestyle and an overall awareness of your health, which can lead to lower medical expenses.