Help in Managing Increased Healthcare Costs

Much has been written and discussed regarding the plight of the uninsured. Various programs and subsidies have been proposed to help alleviate this problem. It’s important to ask, who exactly constitute the uninsured? Most experts define uninsured as people who routinely pay at least 10 percent of their annual income toward medical expenses, not including insurance premiums. Federal law allows the deduction of medical expenses that exceed 7.65 percent of gross income. The burden of increased healthcare costs are not only affecting the uninsured, but also people that have insurance. Of the people that are still fortunate to have jobs that subsidize their medical care, most employers are increasing deductibles, co-pays, and out-of-pocket costs to keep their health plans in place. Premiums are going up and with it, including the employees’ share of those premiums. How can people manage these costs?

There are a number of things you, as the consumer, can do to help with potentially higher out-of-pocket costs. Oftentimes spousal or family coverage can be really expensive. That’s because the employer typically doesn’t subsidize any portion of dependent healthcare. If you’re family members are in good health, it may be helpful to enroll them in a comparable individual plan. (Depending upon the state you live in, group coverage may be their only option if they are uninsurable.) On the portion of healthcare that you pay on a group health plan, whether for yourself or your dependents, be sure the amount you pay is taken out before taxes as well. Another way to help minimize medical expenses is to enroll in voluntary products if your employer offers them. These are payroll-deducted plans that start around $4 a week. They usually are taken out of your paycheck before any taxes are taken out, reducing their cost further. These voluntary plans pay an amount per occurrence for accidental injuries, certain sicknesses, lost time from work, etc. to offset the increased exposures from employers trying to manage their bottom line.

When you are faced with medical debt it may be tempting to ignore it. In a word, don’t. The bills themselves won’t go away. Typically they are turned over to a credit agency that then starts harassing you to pay. The best thing to do is to work out payment arrangements with the providers before it goes into collection. When a bill goes into collection, the provider is paying that agency a fee to attempt to collect the debt for them or giving them a percentage of what is ultimately collected. It’s far better to try and negotiate the balance due directly with the providers than to try to negotiate after they have already put it into the collection agency’s hands. If you aren’t able to negotiate your bill down don’t be tempted to put it on a credit card. Putting it on a credit card totally eliminates your chance of reducing the bill through negotiating with the provider. Additionally, should you miss a payment on a credit card, the interest rate could be hiked to 29 percent or higher. The interest that a collection agency charges shouldn’t be anywhere near that high. Same thing with second mortgages. Although you may be able to write off the interest, the additional time it takes to pay off your mortgage translates into many, many times the original amount of the medical debt and also puts you at a greater risk of foreclosure.

Many people are eligible for assistance with their medical bills and don’t even know it. It’s important to know not only federal programs, but state-specific programs designed to help those faced with high medical expenses. Even pharmaceutical companies have programs to enable people to purchase their necessary medication at reduced prices. The key is to explore your options.

You don’t have to be a slave to your medical debt. The key is preparing. Supplemental programs can be very helpful and doesn’t cost the employer anything. Help and various options are available to help you manage medical debt once you get it. The key to this is being informed. Doing a little research before you throw your hands up in despair is always a smart choice.

Until next time, stay healthy!