Overwhelmed by medical expenses? Reach out to financial institutions for help
One of the leading reasons people fall behind on personal finances — and one of the best reasons for an emergency fund — is medical bills. Studies show that medical bills contribute to financial struggles for many families, and that’s why we often work with our members on how to recover from a situation like this. This week I’m going to share a few tips on managing medical expenses.
Plan for known expenses
Although nobody can ever fully predict future what medical issues, individuals or families do have some level of control over medical expenses. If your employer offers medical coverage, make a detailed list of what you know you’ll need to pay for in the coming year when you make your elections, as this will be top-of-mind. This includes co-pays on things like scheduled checkups, required follow-up appointments, immunizations, scheduled dental cleanings and medications. If your employer offers it, ideally you could break up the amount and place this in an health savings account, so you know you’re always covered for the required appointments. If not, create your own savings account through your financial institution that you can add to and draw from.
Do your homework
Once you have an appointment or procedure, it’s coded and submitted to insurance, coverage is established and you’re sent a bill. During that time, administrative errors can occur, as many professionals have touched it. It’s not something to worry about, but it is important to inquire about the balance ahead of time and double check that your bill matches what you were told. If the amount it still higher than you can afford, most medical organizations offer some kind of payment plan. Calling to check is always better than not paying the bill, as this can have an impact on your credit. Also, be aware that some medical institutions are known for sending patients to collections quickly.
Consider structured debt
Even with the best planning in place, surprise medical bills can still pop up and wreak havoc on your finances. We recommend that every family work toward an emergency savings, but many have had to dip into those funds out of necessity during the COVID-19 pandemic. If you end up in that position, know you’re not alone. We work with our members often on solutions and recommend that you reach out to your financial institutions for options.
Some people wrongly assume that banks or credit unions can’t help with medical bills, but there are certainly ways to consolidate and structure debt so you’re paying as little interest as possible until you’re able to catch up.
As we continue to endure the global pandemic, it’s perhaps never been more important to align medical needs with finances. I hope these tips help you prepare for or recover from medically related financial obstacles for years to come.
Kat’s Money Corner is posted on Dollars & Sense every Tuesday. Kat Hnatyshyn, when not blogging or caring for her little ones, is a manager with CommunityAmerica Credit Union. For more financial chatter, visit http://communityamerica.com.