Medical bankruptcy is a serious and almost impossible situation to free yourself from. Rising healthcare costs can make medical bills skyrocket.
Medical bills were the biggest cause of U.S. bankruptcies in 2013, according to a CNBC report, with over 646,812 Americans declaring bankruptcy that year. Healthcare costs are higher than ever and some individuals are not able to pay back these costs with insurance, let alone without.
Below are tips to avoid falling into bankruptcy due to medical expenses and to have extra savings in case of a medical emergency.
Tips to Avoid Falling Into a Medical Bankruptcy Trap
Prevent and Manage Chronic Diseases
Taking preventative measures to ensure you stay healthy is important to managing medical costs. Things like eating right, exercising, and regular visits to the doctor for checkups are ways to up preventative measures.
Build an Emergency Plan
Having a plan for when the unexpected happens is highly beneficial and provides you an escape route when medical bills are in question. Establish a financial emergency plan and organize all your important documents (like bills, medical records, and insurance information) in one location so you have easy access to them when you need it.
Have Your Deductible Amount in Savings
Make sure you have enough in savings to cover your health insurance deductible to prevent money struggles once a bill does come. Health Savings Accounts can help you save specifically for medical needs. Setting aside a separate account ensures you’re covered in case of an emergency medical situation so you won’t be tempted to spend anything.
Review Medical Bills
Make sure to review any bills you receive for due dates and to make sure none of them are overdue. If the bill goes to collections, that’ll be harder for you to take care of and can potentially harm your credit score. It’s also important to review for inaccuracies to make sure you’re not overpaying for care.
Establish a Payment Plan
Come up with a plan to pay your bills in a timely manner and avoid extra costs. Work with your insurance company and providers and see if they can help you set up special due dates if necessary.
Set yourself and your family up for success by saving and creating medical emergency plans. Most importantly, take care of yourself and stay healthy to hopefully save on medical costs in the long run.