Managing Your Healthcare Costs

No matter what your financial situation is, you should prepare now for changes in health care that could affect your household budget. Medical debt, in fact, is one of the three leading causes of personal bankruptcy, according to the Consumer Bankruptcy Project.

Rising health care costs in the United States impact everyone. According to the U.S. Census Bureau, more than 45 million Americans are currently uninsured. And that's not only those living below the poverty line. Consumer Credit Counseling Services (CCCS) agencies like ours can offer sound advice and counseling to consumers seeking ways to prevent or manage medical debt.

How to Avoid Unmanageable Medical Debt

Don't reduce or cancel your coverage. Health insurance is simply getting too expensive for many. But if you are considering reducing your medical coverage to save money, or considering having no insurance at all—don't. It's a debt risk not worth taking for either yourself or your finances. An overwhelming 70 percent of the uninsured patients have to deplete their savings to pay for medical care debt.

Look carefully at the plans offered by your employer. Many employers are offering more consumer-driven policies, shifting the burden of paying for medical coverage to employees. But read the fine print. Often, according to Consumers Union of U.S. Inc., publishers of Consumers Report, many insurance policies can fragment medical coverage, potentially leaving the employee to manage the gaps in insurance protection. The employee pays more, but ultimately gets no better or sometimes worse coverage.

Assess your needs. When it comes to selecting a health plan, ask your employer about all the options available. To compare plans, you may want to make a list of all the reasons you have had to visit the doctor in the past. Next, find out to what extent each plan would cover the costs of those visits. And make sure to ask about all possible expenses (such as deductibles, co-payments or coinsurance that may be passed on to you).

Save money now. There is no quick fix for managing medical debt. But there are ways to prepare for the unexpected. It's always cost effective to save a percentage of your monthly income for medical expenses just in case. And if you suffer from a chronic illness, ask your doctor (or insurance carrier) about disease-management programs, which can help you save money in the long haul.

CCCS Debt Counselors offer other tips for managing your healthcare budget:

• If you are uninsured, find out about local free clinics. Often, university medical centers provide services provided by medical students at reduced costs.
• Ask your pharmacist about generic prescription drugs. Sometimes, there are cheaper alternatives to the ones your doctor prescribes.
• Contact your state health department and ask about Medicaid coverage, which is provided for lower income households and people with high medical bills.
• If you are 65 or older or have a disability, contact the U.S. Health Department and inquire about Medicare coverage.

It's easy for medical bills to add up fast. If you're struggling to meet the minimum payments, consult with a debt counselor from our CCCS agency. Our CCCS debt counselors are trained and certified by the National Foundation for Credit Counseling. They can work with your personal financial situation to create a budget and create ways to save money. Their recommendations may allow you to manage your debt on your own. If it is right for you, a CCCS agency like ours can offer you a debt management plan to help you repay what you owe.