How To Protect Yourself From Medical Debt

The average American household has $18,660 in medical debt. Such debts can last a lifetime and grow with every new medical procedure required. Fortunately, you don’t have to put yourself in this much debt just to get treatment. Below are a few preventative measures you can take to reduce medical debt.

Choose the right health insurance policy

Health insurance can help to cover medical costs, but it’s important to choose the right health insurance policy. Basic plans sometimes only cover essential inpatient treatments like surgery. A comprehensive plan can cost more per month, but can save you more money in the long run by covering diagnostic tests, consultations and minor treatments. If you have a health condition, consider the fact that there may be specialist policies out there for you, which may cost less with less limits on certain treatments. This guide by Selena Simmons-Duffin explains how to choose the best insurance plan.

Don’t set your deductible too high

The deductible is the amount you’re willing to pay for treatment out of your own pocket. Agreeing to a higher deductible can result in lower monthly insurance payments. However, when you actually need to get treatment, you could find that your insurance company is only willing to pay a small amount towards your treatment – resulting in you having to pay the rest with a large loan. For this reason, you should avoid agreeing to an overly high deductible. 

Consider a HSA or FSA

A health savings account (HSA) and flexible savings account (FSA) are two types of savings account that can be used to contribute pre-tax earnings to be spent on medical expenses. Such savings accounts can reduce your reliance on debt. HSAs are typically only available to those with a high deductible plan, however the money in these accounts roll over from year to the next. FSAs are available to any employee regardless of what type of insurance cover you have, however you must spend the funds deposited by the end of each year – otherwise they will be forfeited. 

Ask medical providers about financial assistance options

Financial experts like Alex Kleyner suggest always looking into financial assistance for healthcare. Many people who qualify for such assistance do not consider it. This includes grants, zero interest loans and government/state funded treatments. Organizations like the Patient Access Network Foundation and Healthwell Foundation offer this support. Hospitals and clinics may be able to help you explore these financial assistance options – some may even have their own financial assistance programs or may partner with local charities.

Look after your health

The best thing you can do to reduce medical debt is to look after your health. While some health problems are hereditary or otherwise out of our control, there will always be health problems that are the result of our lifestyle that we can prevent. Exercising regularly, eating healthily, limiting stress, getting enough sleep and giving up bad habits like smoking and heavy drinking can help reduce the risk of future health problems and ultimately save you money in medical bills (your health insurance rates could be cheaper too).