Everyone faces medical bills eventually. Whether it’s a planned expense, like the birth of a child, a routine checkup, or an emergency, medical bills can cause serious financial heartache. Be sure to familiarize yourself with these basic facts about medical bills and you can save yourself a lot of trouble.
1. There’s a Difference Between a Copay and Coinsurance
When you choose your insurance, your copay and coinsurance rates are both key pieces of information to understand. Copays are a flat fee that you’ll pay each time you have a procedure or pick up medication. Your copay won’t change regardless of the full cost of your bill, allowing you to more easily manage your medical expenses. Coinsurance, on the other hand, is the percentage of the total bill that you pay personally. As the cost of your medical services goes up, so does your coinsurance payment. Knowing how your insurance will bill you can help you plan for your bills.
2. In-Network and Out-of-Network Coverage Are Different
Your insurance company has pre-negotiated discounts with healthcare providers in their network called “in-network providers”. On the other hand, “out-of-network providers” may not discount the services you’re receiving (even with a referral). As a result, you’ll likely end up paying more. Make sure to ask if both your medical facility and your doctor are in-network before you have any work done and you can save a lot of money and time.
3. Medical Bills Are Negotiable
Medical care is expensive, especially if your insurance coverage is weak or if you don’t have coverage at all. Fortunately, many offices and facilities will allow you to negotiate the cost of services, if necessary. Go into your negotiation as early as possible, be honest with your provider about what you can afford, and discuss repayment terms that will fit in your budget. This is particularly beneficial if you have old medical debt that needs to be paid. Providers will often be willing to accept less than you owe if you can pay it all in one lump sum.
4. Paying with Cash Can Yield a Lower Cost
Speaking of negotiating, paying with cash on the spot is often one of the best deals you can negotiate with your providers. Cash payments remove credit card fees as well as offering an immediate source of income for the practice, and many doctors are willing to offer substantial discounts for this convenience. Of course, there is one catch: because you’ll be paying on the spot, you won’t get any help from your insurance provider and it won’t count towards your deductible. You’ll have to decide if cash payments are the best option for your circumstances.
5. Medical Debt Impacts Your Credit
Whatever deal you work out between your provider and insurance company, it’s important to stay on top of your payments. If you have medical bills that you aren’t able to pay on time, they can be sent to collection agencies and reported to the credit bureaus, creating a negative impact on your overall credit score. Late payments could ding your credit and make it harder to buy a home, finance a car, rent an apartment, or apply for an assisted living facility. It’s vital that you don’t allow medical bills to go unpaid. If you’re having trouble paying, try to make arrangements with your medical provider to establish a payment plan and make sure you don’t fall behind.
6. You Need to Confirm That Your Bills are Paid in Full
Medical billing is complicated. There’s nothing more frustrating than thinking that you’ve paid off a bill completely, only to discover months later that it’s gone to collections due to missed payments. Whether your payment was lost in the mail, your insurance didn’t cover their full amount, or the medical facility entered the wrong information, it’s much easier to clear up any confusion before you’re sent to collections. Be sure to track your progress while paying off bills and get confirmation once your bill is settled.