Sense & Centsibility Blog

Dealing with Medical Debt

This week we're flashing back to a post about how to deal with something none of us want to: medical debt. The key is don't avoid it and be proactive. Read on...

Many people do not anticipate having medical bills, but unfortunately most of us will have them every now and then or have on-going medical bills. This debt can be overwhelming, especially if you or a family member are faced with bills from multiple providers and/or have an on-going illness. Here are five ways to help navigate and hopefully reduce the anxiety associated with medical debt.

1. Call your healthcare provider right away, even if you can’t afford to pay the medical bill

Many clinics have financial workers that you can talk to about your bills. There may even be programs available to help with some of the debt (if you meet the qualifications). So don’t wait – call right away to find out if something is available to you.

2. Try to set up payment arrangements

Instead of opting for a credit card to pay the entire bill, determine if a payment plan is an option. This way, you can avoid paying potential high interest on a credit card. If the payment arrangements don’t seem affordable at first, look through your budget to see if there are any temporary cuts you can make until your medical bill is paid off.

3. Find creative ways to pay your bill

Can you have a garage sale or sell something you no longer use/need? Can you babysit, mow lawns, shovel snow, or get extra hours at work temporarily? For more ideas, check out our blog post, "Ideas for increasing income."

4. Consider using savings

However, be strategic…don’t pay off an entire bill and then leave your savings balance at zero. If you have more than one bill to pay or something else unexpected comes up (i.e. car repair), then you might find yourself falling behind on something else or accruing credit card debt. The best way to use savings in this case is to pay a chunk of the bill up front and then make affordable monthly payments until the bill is paid in full – using savings only if necessary for those monthly payments.

5. Use a Health Savings / Flexible Spending Account

Many employers offer these products where you make monthly contributions and that money is set aside for medical expenses that insurance doesn’t cover. It’s taken out before taxes and then you can use it when a medical expense comes up. Before you determine the annual amount to contribute to your HSA/flex spending account, estimate your annual medical costs.

LSS Financial Counseling is here to empower you to take control of your finances. Call us at 888.577.2227 if you would like to meet with a Financial Counselor either over the phone or in person to create your individual action plan. Or, go to the LSS Financial Counseling website to get started.  

Don’t wait to improve your financial future!

Author Elaina Johannessen is a Program Director with LSS Financial Counseling.