Wednesday, September 26, 2012

Wealthy Wednesday #2

It’s nice being able to plan out things that will happen and how we pay for them. Unfortunately, one thing we can never seem to predict is medical bills. And they can add up to be astronomical, even with insurance.

So here’s a few things that can help you manage those bills:

  • If you have the benefit, USE a flexible spending account or a healthcare savings account. These are a little different, but both offer you to save your money PRE-TAX (comes out of your pay check and reduces your taxable income) to use for qualified medical expenses. The main difference between the two is that with an FSA, you set aside the money and must use it in that year. If you don’t use it, that money is forfeited. It’s important to try and estimate your expenses but not go over. With an HSA, you can set aside the money and use it when needed, with no deadline. If you don’t use it for a qualified medical expense set by the IRS, you will face taxes and maybe penalties. The nice things about these accounts is that you reduce your taxable income, therefore reducing your taxes, and it creates a fund that you can use to pay those unexpected bills. Many employers offer these accounts to their employees so check to see if you have one available. You can also set up an individual HSA. (not related to medical bills, you can also use an FSA to pay for daycare. This means you can pay your daycare expenses with pre-tax dollars. If you have questions on this, let me know).
  • Another way to help with your bills is call and negotiate. If you have a large bill, most practices will be happy to set up a payment plan as long as they are getting something. I’m not sure about all of them, but the ones I have encountered do so without charging interest.
  • If you have a bill that is somewhat large, you can often call and negotiate a discount in return for paying the balance in full. We did this both times with our hospital bills when the kids were born. I think depending on the balance, how things are going, etc determines the discount. I think with Ava, we only got a 15% discount and with Reed we got 25%. Even if you aren’t paying in full, ask if the bill can be reduced. You never know.
  • Most healthcare providers offer discounts for insurance carriers, reducing the amount of charges. These discounts typically don’t apply when you don’t have insurance, so using this knowledge, you can possibly try to negotiate a lower bill.
  • Review your bill. Mistakes can happen. You should use this tip with everything, not just medical bills. Don’t just take it for face value and pay. Unfortunately, there are even companies who try to sneak charges in on you, and they do it because so many people don’t review the charges.
  • You could possibly qualify for assistance for your bills. If you have high bills, you may speak to a financial counselor at the hospital to see if you qualify.
  • And as always, you can set aside money in a monthly budget to use for medical expenses and keep it set aside until you need it.

Obviously, not all of these will work for everyone. There are ways to help soften the blow that comes with medical bills. I hope you find these helpful, and I’d love know any other topics you may want me to discuss!

3 comments:

  1. Sarah, this is great, and I can attest that many places will setup a payment plan and/or give you an early payoff discount (hospitals have been better to work with than others in our experience).

    If you have several bills from one place, sometimes they will consolidate them, but is there anything you can do if you have several bills from several different practices?

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