Let's Talk Medical Costs, Shall We? ~ Personal Finance Blog

I got a message in my PG inbox the other day from a reader who wanted to see an article about medical costs. They are on disability and medical debt was a concern. I spoke to other readers who also expressed concerns with the dents that medical bills make in their budget. 

  So, we are going to tackle this topic and I urge readers to TALK about this topic, whether it's on the PG Facebook page or just over coffee with a friend. It's so so SO important, and we'll get into WHY.....and what you can do about medical costs if you're looking to be financially secure and debt free in the future.

CHECKING MY PRIVILEGE
I realized that we have been extremely fortunate throughout our 11 year marriage to have little issue with medical debt or costs. This doesn't mean I'm completely ignorant on the subject, but I do have to acknowledge my privilege here. 
My husband works in a state job, so we get....probably...some of the best insurance coverage currently offered in Wisconsin. 
Our out of pocket costs are very minimal. When I had my 3rd child in 2016, I believe we paid about $2000 out of pocket, and that was after a difficult birth and an extended hospital stay for me. 

So, I KNOW. I know we are lucky as all hell to have what we have. If we had to struggle with medical costs, we definitely would not be in the position we are today. 

I don't say this to rub it in, quite the contrary. I say this to make it clear that I am not coming from a place of blind apathy to the struggle of medical costs in this country. Believe me.

13103406_10209658303920321_3742926932510545750_n.jpg

So, now that I've said that, let me tell you where I AM coming from.

After I graduated high school and was out on my own, I was completely uninsured. This was far before the ACA (Affordable Care Act), so you could BE uninsured without penalty. You just couldn't get sick. Right? I did not qualify for any state benefits. I was a single person with no children. I actually had a woman at our local community care clinic tell me that she could better help me with coverage issues if I were to pop out a kid.

Really. This happened. 

I worked as a bartender and waitress before I married my husband and those jobs do not typically lend themselves to stellar healthcare coverage, if any at all. So, when I screwed up my shoulder lifting big dining trays, I pretty much had to just suck it up and ice the hell out of it. Going to the doctor for it wasn't going to happen.

I went roughly 7 years without insurance. When I married my husband he was working a job that offered really great insurance coverage. Coverage that would have likely not existed under the ACA. The company he worked for had only 4 employees and was pretty "Ma and Pop". So, when we had our first two children we were beyond fortunate to be covered under their amazing plan. Everything was paid for. We never had any out of pocket costs. 

When he left that job and moved to a job that did not offer such great coverage, I (a self-employed person) took over the responsibility of our healthcare plan. We paid roughly $380 a month through Dean Care to cover our family of four, which is incredibly affordable from what I've found. What made it so affordable was dropping maternity care from the plan. I believe our deductible was $5000.

Then the ACA came along and we were booted off our plan.

Fortunate circumstances stepped in once again for us and it was right about that time that my husband found a new position with the state. Enter state insurance and we've been blessed with great coverage ever since.

photo-1471864190281-a93a3070b6de.jpg

Over the years we have had medical bills, which we have included in our debt snowball since 2012. We haven't had any medical bills in the past few years, however. When they do come about, they take their place on the snowball until they are paid off. 

SCARY STATS
The statistics on medical care, coverage, and cost in America are scary. There's no other word for it. 
Roughly 27 Million people (per Wikipedia) still do not have health insurance coverage at all, which means with each illness or injury they rack up out-of-pocket medical costs. Without specialized insurance contract pricing, those out of pocket costs can be astronomical. I know when I had my last child, the cost before insurance kicked in was about $36,000. 

Many "average" families in the United States may still fall into the crack of making "too much" to qualify for subsidies or Medicaid, but too little to get ahead of mounting medical debt. 

One main problem that is uniquely American is that even with insurance coverage, it's a rarity for 100% of costs to be covered. Insurance companies negotiate with healthcare providers for "contracted rates" and for what they will...and will not....cover. 

Studies show over 43 million Americans have outstanding medical debt, with the average amount being $1766. Some Americans with on-going medical issues have revolving medical debt that rivals home mortgages or school loans. 

photo-1513838439567-68d495c5c98b.jpg

WHAT TO DO? 
So what can be done to slow the bleed of medical spending? What can be done to reach debt freedom if medical bills keep cropping up? What can SERIOUSLY be done when it seems as if, no matter what, the system is designed to fail you? I am no fan of pointing the finger at systemic failures as the cause of debt, but in this case the system's shortcomings are clearly partly to blame. 

There are no easy answers, but approaching the debt head on and not hiding from it starts us off on the right foot. 

Here are some ways to attack your medical debt and not let it beat you:

1. DO NOT IGNORE

I know it can be tempting to not even OPEN your EOBs (explanation of benefits) or bills, but ignoring them will never help the issue. Once they are sent to collections (which some providers will do faster than others), you're kind of SOL. 
 So, keep your various bills organized. Make sure you look over EACH Explanation of Benefits (from your insurance company) and compare it to your billing. I used to work in medical billing and believe me, they screw up ALL the time. They are counting on the compulsive nature of people to automatically pay what the doctor tells them to pay or face possibly losing access to care. They double bill constantly. One provider has no idea what the other is doing. It's up to you to check their work. 
  
 Open a dialogue with the financial office at your provider. If they know you are actively addressing the bills, they typically will be more lenient with payment plans. Often, they will set up a very affordable payment plan for you as long as you promise to pay monthly.

2. FIGHT FOR YOUR RIGHT (NOT TO PARTY BUT TO BE COVERED)

Sometimes, insurance companies and some providers of care are the evil-est of all evil jack-asses on the face of the planet. They will deny things they know should be covered. They will red-tape you to death. They do not see you as a name with a medical issue. They see you as a number. That's just the way it goes. Good ole' American healthcare (can you tell I'm not a HUGE fan of our current system?)

But, we have to work under their rules.
So learn the rules.

One time I had a radiology provider refuse to cover a claim because they said I gave them the wrong information when I was admitted. I knew they were full of all the bull-dookie (you know this girl has all of her insurance information in her wallet at all times), so I ended up pulling their provider contract and nailing them with their own rules to get the claim covered (basically, to make a long story short, if the provider was late submitting the claim....as they were because they claimed I gave them the wrong insurance info, which I didn't....I cannot be charged. But they charged me anyway in hopes that I would not be aware of that rule and just pay it. See. Sneaky) 

It felt really good to nail them all with their own back-asswards information. They probably weren't counting on someone who used to negotiate insurance contracts for a living coming back to bite them. They make things intentionally confusing because they are betting on us, the lowly patient, to not have a clue what's going on.

So, get a clue. And fight them with it.

You have a right to resubmit claims, to appeal coverage, and to fight for attention from providers. You also have a right to demand pricing for procedures and care upfront. 

How many people even ASK how much someone is going to cost before it happens at the doctor's office?

photo-1516841273335-e39b37888115.jpg

3. TAKE CARE OF YOURSELF

Here's the thing, if you're overweight, a smoker, a drinker, or have other unhealthy habits, this is going to increase your medical costs....if not now certainly in the long run. So care for yourself the best way you can.

If you have an ongoing medical issue (diabetes, cancer, etc.), then follow doctor's instructions on how to live the healthiest way possible. Try not to skip doctor visits, even if you're afraid of the charge. Letting medical issues go just leads to more serious medical issues....and higher charges. 

  But it costs NOTHING to quit smoking. It can even be cost EFFECTIVE to eat better or in smaller portions. It saves you money to stop drinking. Over the course of your lifetime, you are better off if you treat your body more like a temple and less like a garbage can. 

 Some folks can't help their medical issues. But some folks can. If you CAN....help rather than hurt.

4. HIRED GUNS

If you are getting nowhere negotiating payment of your bills, consider hiring a professional negotiator/medical biller to help you arrange payment. They speak the language and can advocate for you. A medical bill negotiator can be found at www.billadvocates.com. (This is not an affiliate link. I just found them via a search.) 

Also, don't be afraid to negotiate costs BEFORE a medical procedure or visit. You can also pre-pay for a discounted rate with some providers. 

5. DON'T PANIC

When we panic we make bad financial decisions. We dip into our 401K, we use credit cards to pay on medical debt, we allow things to go to collections. 
The most important thing to do when facing on-going or rising medical costs is to keep the lines of communication open with who you are paying and your insurance company.
 Also, make sure you are always, periodically, checking  your coverage options to see if you can decrease your monthly premiums or find better coverage elsewhere. 
 I have some friends that go through Christian Co-Ops for coverage, some who have found affordable coverage through the ACA and carry a high deductible to lower their premium, and some who have moved jobs in order to get better coverage.
  In this country, where we do not have universal healthcare, sometimes you have to sacrifice what you WANT in the moment for what your family may NEED. And I KNOW that sucks. I know sometimes the premiums are more than the average mortgage. It's a shitty situation, for sure. Which is why I suggest making yourself a health-insurance expert. It's not terribly exciting, but knowing our options can lead us to more flexibility and cost savings. 


Depending on how much medical debt you have, there are several ways to pay it off: 

- I always suggest the snowball method first. List your debts smallest to largest (interest rates do not factor in). Pay the minimum on all except the smallest and attack the smallest with all extra funds. 
- If you cannot afford to snowball your medical debt, consolidate it with a consolidation loan. I'm not a HUGE fan of these, as it's just moving debt around and not attacking it, but it can make things more manageable and easier to address, especially if the medical provider is done billing you for awhile. 
- Configure a health savings account if you have on-going medical expenses/needs. 
- Just like anything else that is included in our budget, if you know that medical expenses are one of your larger expenses, you will have to adjust your other, more variable expenses to make room....if possible. So, for example, if you bring home $50,000 a year household income, and your medical costs are $15,000 a year or something similar, you are probably not going to be able to afford something like a large car payment or $1000 a month in groceries until you increase your take home or decrease your debt. Medical is going to take a larger bite of your budget. 

  If I can get a TAD political for a moment, I truly feel that until this country catches up with the rest of the industrialized world and gets on the Universal Healthcare train, we will always have an ongoing medical debt issue. Healthcare costs are astronomical in this country and our wages are not rising to meet the demand on consumers. It makes me sad that, very often, folks are turning to GoFundMe or similar means to cover medical costs when something goes wrong. 

photo-1486218119243-13883505764c.jpg


 A medical or health issue should never devastate someone financially, but they do all the time. 
  So, do your best to keep abreast of your charges, keep on the insurance company and provider's butt at all times, and be your own best advocate. Let's hope for change in the near future but until then, you are your own hero.