Medical bills are often unavoidable, and they can also cause a huge financial strain.
Americans owe a whopping $220 billion in medical debt, according to the Kaiser Family Foundation. And all told, roughly 14 million people owe more than $1,000 in medical bills.
Since medical bills can be such a burden, you need to be careful when paying them. And that means avoiding these all-too-common mistakes.
1. Not making sure the charges were run through insurance
Just because you hand over your health insurance card before a medical appointment does not automatically mean your insurance is getting billed for your visit. If you receive a bill that seems unusually large relative to your typical bills, perhaps your provider billed the wrong insurance or simply forgot to run the charges through your insurance altogether. So don’t just assume you owe the money and pay it.
The best way to know is to log into your account on your health insurance provider’s website and see if you can find a claim that matches the appointment or service you’re being billed for.
If there’s no such claim, contact your provider to see what insurance, if any, was billed. Then, confirm your insurance provider and ID number and ask that the claim be submitted.
2. Not confirming the correct billing codes were used
Medical billers aren’t perfect. Unfortunately, sometimes, all it takes is a transposed or incorrect billing code number for an insurance company to reject a claim for services.
If you’ve received a bill that leaves you owing more money than expected, log into your account and review your claim or explanation of benefits to see why it was rejected. Or, call your insurer and ask. If it’s a billing code issue, your insurer will likely have you go back to your provider and ask it to resubmit the claim using the correct code.
3. Charging costs on a credit card before asking about payment plans
Even with medical insurance, you may end up in a situation where you can’t afford your healthcare bills in full. This may happen if you haven’t yet met your deductible for the year and therefore have to cover the cost of a given appointment in full. For example, if you have a $1,500 deductible and you receive treatment costing $1,000, that entire $1,000 is on you.
You may be inclined to charge your medical bill on a credit card and pay it off over time. But that could end up costing you a lot of money in interest. If it takes you a year to pay off a $1,000 balance at an APR of 20%, you’re handing over an additional $112 to your credit card company.
A smarter move may be to talk to your provider about a payment plan. You may be eligible for a payment plan at 0% interest, or considerably less interest than what your credit card will charge you.
Also, credit cards let you get away with making just your minimum monthly payments. But that could cause a balance to linger for longer than it should, resulting in higher interest costs. With a payment plan through a provider, you may end up paying off your bill much sooner if you work those monthly payments into your budget.
It’s unfortunate that healthcare has the potential to be so expensive — even when you’re insured. Do your best to avoid these mistakes, so you don’t cost yourself money needlessly.
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