Medical debt can be a significant burden on family finances, especially when unexpected expenses arise. However, some common money mistakes can exacerbate the situation and negatively impact long-term financial stability. In this article, we’ll discuss the top 5 medical money mistakes that people make and offer solutions to avoid them. By following these steps, you can regain control over your finances, improve your credit score, and start saving for retirement.
#1. You’re a Non-Negotiator
One of the most common money mistakes when dealing with medical bills is failing to negotiate with your medical provider. Negotiating is a critical component of paying off medical debt, and there are three simple steps that Crush Medical Debt teaches you to follow to make it happen.
First, you should call your medical provider and ask them for an itemized bill with the CPT codes. This will help you understand exactly what services you received and how much you were charged for each one.
Second, look up the CPT codes and find the price that Medicare will pay for each procedure and service. This will give you a benchmark for the fair price of your medical care.
Third and finally, call your provider and tell them the amount you’re willing to pay, and tell them that you need an interest-free payment plan. Most providers are willing to work with patients who are proactive and upfront about their financial situation.
By following these steps, you can take control of your medical bills and avoid falling into credit card debt or taking out personal loans with high-interest rates. Negotiating with your medical provider can also improve your credit score and put you in a better financial position in the future.
#2. You are a Care Qualifier
If you’re struggling to pay your medical bills, it’s essential to know that non-profit medical facilities are required by federal law to provide sliding-scale income-based discounts for patients in the communities they serve. Unfortunately, many patients don’t take advantage of these programs and end up paying more than they need to.
To avoid this mistake, you should check whether you qualify for financial assistance before you receive medical care. Many non-profit facilities have income guidelines posted on their websites or available upon request. If you do qualify for financial assistance, make sure to take advantage of it.
#3. You Are Credit Crushed
One of the most significant money mistakes that patients make is putting medical bills on credit cards or taking out personal loans. While this might seem like a good short-term solution, it can have long-term consequences on your credit score and overall financial stability.
When you put medical bills on credit cards, the debt affects you the same way any other consumer debt would. This means that if you have high-interest credit card debts, your credit score can suffer, making it difficult to secure loans or credit in the future.
To avoid this mistake, consider starting a savings account specifically for unexpected medical expenses. This can help you avoid credit card debt and personal loans with high-interest rates. You should also review your credit report regularly to ensure that there are no errors or discrepancies that could negatively impact your credit score.
#4. You’ve been Dubiously Denied
Another common money mistake is failing to challenge insurance denials. Insurance companies can deny coverage for various reasons, including claiming that a service is non-emergent when it really was an emergency.
If you receive a denial letter from your insurance company, don’t be afraid to challenge it. You can start by getting the CPT codes for the services you received and finding out if they were indeed emergent. Armed with this information, you can make a case to your insurance company and potentially have the denial reversed.
#5. You Have Been Double Dealt
Finally, many patients fall victim to the practice of balance billing, where medical providers charge patients for amounts not covered by insurance. This practice is illegal, and patients should fight against it.
For example, if an in-network provider would normally charge $100 for a service, but they’ve negotiated to accept $10 from the insurance company (not including co-pays) then they can’t come to you and say that you owe the remaining $90.
If you receive a balance bill, don’t hesitate to contact your medical provider and your insurance company. You have the right to know the details of your insurance coverage and what you should be expected to pay out of pocket. By advocating for yourself and understanding your rights, you can avoid falling into financial traps like balance billing.
Conclusion:
Medical debt is a reality for many families, but it’s important to avoid common financial mistakes that can make the situation worse. By negotiating with medical providers, taking advantage of financial assistance programs, avoiding credit card debt, challenging insurance denials, and fighting against balance billing, you can take control of your finances and build a more stable future.
In addition to these tips, it’s always a good idea to seek the advice of a financial advisor or planner. These professionals can help you develop a comprehensive financial plan that takes into account your current medical debt and savings and investments goals.
With a little bit of planning and hard work, you can achieve financial freedom and start saving for retirement without being held back by medical debt. By following these steps and avoiding common money mistakes, you can set yourself up for a brighter and more secure financial future.