South Florida Sun-Sentinel Palm Beach (Sunday)
Protect yourself against high medical expenses
I have been a court mediator for about 20 years. A large number of my cases have involved a collection company suing a person who has not been able to pay medical bills.
The best way to avoid crushing health care expenses is to secure good insurance.
You may be eligible to enroll in a health savings account (HSA), which confers tax advantages as long as you only use the proceeds for health care expenses. You can use the funds to pay for health care expenses that your insurance doesn’t cover. You can contribute up to the time you enroll in Medicare. After that point, the account can continue to build value and still pay health care expenses even after you enroll in Medicare.
You may also want to consider long-term care (LTC) insurance. Long-term health costs are expensive and are not covered by Medicare. If you get LTC coverage prior to retirement, it’s easier to obtain and less costly. You can also consider buying hybrid insurance coverage, which combines the benefits of life insurance (or annuities) with LTC benefits, which may be less expensive than a traditional LTC policy.
Make sure you understand your insurance coverage. When you receive a medical bill from a hospital or other provider, check that all of the charges are covered by your insurance coverage. Request an itemized bill. If you determine an item is covered by insurance, have the insurance company contact the health provider to indicate coverage, and have the provider issue you an updated bill.
If you have a choice, select a nonprofit hospital when appropriate. They must provide qualified low-income participants with free or discounted care.
Don’t hesitate to ask for lower prices. Don’t assume that, just because you are billed a specific amount for a procedure, you can’t obtain a lower price. Use the health care blue book for a list of prices for different procedures. Refer to that document and ask the hospital or provider to bill you for a lower amount.
Don’t select insurance options in a vacuum. Use professional advice. For example, when you are selecting a Medicare option such as a Medigap policy or deciding whether you should use a Medicare Advantage option, use the free services of SHIP representatives, available in every state. Also consult consumer health care books for guidance; I recommend those written by Philip Moeller.
If you face significant hospital bills, know that you can negotiate. Don’t hesitate to ask for an interest-free payment plan over an extended period.
One way to avoid interest charges on a large hospital balance is to enroll in a CareCredit plan. However, you should only use this option if you can pay the outstanding bill in full at the end of the repayment period, or you’ll face retroactive interest charges at very high rates.
If you are facing large health care costs and don’t have high income or large assets, consider filing for Medicaid, which can cover costs not covered by Medicare. I recommend discussing this option with an attorney who specializes in Medicaid.
If you are sued by a collection agency, be prepared to negotiate terms. These companies generally buy collection cases for pennies on the dollar. Accordingly, they are in a position to negotiate. You can generally negotiate for a much smaller payment amount because of this. This is especially true if you can make payments in a shorter time frame, such as 90 days rather than three years.
If your medical expenses are beyond your control, bankruptcy is an option. I recommend dealing with an attorney who specializes in bankruptcy.
Don’t hesitate to ask for lower prices. Don’t assume that, just because you are billed a specific amount for a procedure, you can’t obtain a lower price. Use the health care blue book for a list of prices for different procedures.