What the Health?
Covering Unexpected Healthcare Costs
Healthcare: we need it, it's important, and it's expensive. And as I found out at 27 with what should have been a routine procedure, it doesn't cover everything.
For me, it was a little over $1,500 after insurance.
Which, wouldn't you know, was a completely surprise bill. And, as you probably also know, isn't an unusual thing when it comes to the healthcare system.
I'm not here to make indictments, though. I'm here to give you some tips on things you can do to help alleviate or head off some of those surprise bills – some things I did do, other things I would've done in advance had I expected the unexpected.
Above all, though, remember that while these are some general tips, you should still consult your insurance and healthcare providers to best understand what your plan covers before making any decisions. You'll be glad you did.
1. Pick the right healthcare plan from the start
If your employer or insurance provider gives you multiple options, do a cost analysis on what you're paying versus what you get.
For example, do you need a top of the line, expensive plan if you're a once-per-year-doctor-visitor? You may not. Check with an expert to be sure. Contact your Human Resources office and ask them to determine a plan that's right for your budget and needs.
This goes two ways: you can save on your monthly copays with the right insurance, but you can also save on the big ticket items with the right selection, too.
2. Use your HSA or FSA (if you have one)
Speaking of insurance plans, if you're in a high deductible option, be sure to use a Health Savings Account, or HSA. An HSA is a tax-exempt account designed to pay for medical costs not covered by a high deductible plan.
Just make regular contributions – up to your limit, which varies by age and family status – and you can deduct those dollars from your taxes. The deduction not only saves you on overall costs, but your HSA account essentially functions as its own budget. Contribute to it with each paycheck and watch your earnings grow.
And, if your plan allows for an FSA – or Flex Spending Account – you can use pre-tax dollars similarly, sometimes regardless of your plan option.
3. Budget in advance and get estimates when you can
Life happens and emergencies happen. But sometimes there are procedures, operations, or expenses you know will happen in advance. Whether they're recurring procedures or special moments like adding a family member, there are times you can prepare for what's ahead (take it from someone who didn't).
One thing you can do is compare your healthcare plan to the estimated costs. Call your doctor for an estimate, then reach out to your insurance provider. See what may be covered and how it compares to your remaining deductible. Note that while this may not always be perfect, it can at least give you an idea of what to expect. Don't forget to ask about what doctors are "in plan" and "out of plan." If you're able to be flexible and switch providers, it may be worth it.
Then, it's a matter of building a budget. You should always factor unexpected costs into your budget, but be sure to leave yourself a cushion for estimates that may come back incorrectly.
4. Ask about payment plans or cost reductions
The best thing I did with my unexpected healthcare bill was contact the hospital directly. As it turns out, they had an income-based financial assistance program. After providing them with a copy of my W-2, they calculated a reduction to my balance based on my income, saving me 30% of what I thought I had to spend.
And, because I didn't have $1,500 laying around (kudos to you if you do), I asked about a payment plan. They arranged a 0% monthly plan for me that saved my, well... savings. Remember: service or loan providers just want to ensure they're paid, and if it means arranging a plan so they get the money eventually, many will help you out. Be sure to ask your provider about any available plans or discounts.
5. Ask for help when you need it
I think we can all agree that surprise bills are terrible, but leaving them out there to fester will come back to bite you. Bills sent to collections can wind up on your credit report and hurt your standing in the long run. While that can take time, don't dawdle or you'll come to regret it.
If you find that you need more assistance, reach out to one of our financial coaches for help. They may be able to help you find a debt management option that works for you.
Disclaimer: Visions Federal Credit Union is not an insurance providing institution. The points outlined here should not replace a detailed conversation with your insurance and healthcare providers. Please consult with your plan for complete details on coverage and potential expenses.