How to Begin Tackling Medical Debt
We’ve been listening. We hear you. Having any kind of experience with breast cancer is expensive.
To help answer some commonly asked questions, we brought in an expert, Eva Malone. Eva has 15 years of domestic and international banking and finance experience to her wealth management and estate planning practice. She is passionate about educating individuals, families, and businesses to achieve their personal savings and investment goals. Eva believes that financial literacy is essential for financial success.
Brilliantly: What should someone do when they get a huge bill from the hospital? Call and get on a payment plan? Try to negotiate? Call your insurance first? Where should you start?
Eva: First, you should always call your insurance company and appeal billing. Many people don’t know that you can do this. Once this process is completed, if you still have outstanding medical bills that you are not able to pay you should call the finance office at the hospital where you received treatment. I strongly recommend working on resolving your billing issues directly with the hospital.
The finance office at the hospital will help you understand all the options you have for paying the balance. They may explain ways for discharging some of your debt and this is when you can negotiate a repayment plan. Also, many hospitals have assigned charities that will help you pay off your medical bills, so it’s important to ask the finance office if they are closely working with any.
Most importantly, don’t ignore your bills. If you do, hospitals will sell outstanding debt to medical collection agencies which are much more difficult to negotiate with and most importantly they reported collection accounts to credit reporting agencies. As a result your credit score will go down.
Brilliantly: Many women are in the gray area between being eligible for financial aid from the hospital or non-profit organizations. With the added burden, they’re wondering how they'll dig themselves out of debt or if there is some kind of money available if you're not below the aid threshold.
Eva: There are many financial aid platforms that allow patience to eliminate financial billing burdens. Reaching out to organizations on the state level as well as private charities, is the best place to start. Each hospital has a finance office that can help with eliminating, discharging or guiding you through your medical billing issues. Many hospitals have assigned charities that will help to pay off your medical bills. In the state of New Jersey, where I practice, there’s the State of NJ Charity Care -Hospital Care Payment assistance program.
There are also multiple foundations that help cover non-medical bills. For example, in Minnesota Anxel Foundation will assist with non-medical bill payments such as mortgage, and rent. And the National Cancer Care organization also has multiple ways for providing financial assistance.
Brilliantly: When we first spoke, you mentioned that it’s critical to build up a savings account. But, how is it possible to save and pay off debt simultaneously?
Eva: The first step in dealing with debt is to review all of your debts and see if there are any options to consolidate high interest rate debts into lower interest rate loans. This may include opening Home Equity Line of Credit to pay off high interest rate debts or seeking 24 months 0% credit card balance transfer options. The most important thing is to start paying off debts that have the highest interest rates first. It's vital to draft a 24 or 48 months plan on how much money will be allocated to each account or bill.
The second step is to draft a basic monthly income and expense sheet. You need to have a road map as to what are exact expenses in your household and where your money is going.
There are many free mobile applications like Mint that will allow you to link all your accounts into one app. Mint will categorize all your expenses and provide a visual chart. Then you can see if you have any unnecessary spending that you can cut. Having a total overview allows you to see if there is some money that you can put into your savings account.
Even a little will make a big difference! You can start saving 3% of your paycheck each month and once your debt is reduced you should allocate 20% of your income into your saving account. Ideally, each household should maintain 6 months of living expenses in their savings account.
Brilliantly: How to deal with the financial stresses while also trying to heal.
Eva: Trying to heal while also dealing with the financial implications of illness are difficult.
Creating a plan and structure will help with the feeling of being overwhelmed. We all feel stressed in situations that are unfamiliar and problematic especially when we don’t know most of the answers to questions we are asking ourselves or others. Once you have a control of your financial plan and you are aware of your options you will feel financially less stressed so you can focus more on your healing.
And, I bet it’s something that friends and family would be willing to help with. Many times people want to help but don’t know what assistance to offer- asking them to do some research or make some calls might take some of the stress off your plate.
Eva Malone’s journey with money and business started at a very young age. Both of her parents were successful real estate entrepreneurs who inspired and educated her on how to invest and build successful businesses. She is a native of Poland who emigrated to New York City in 2001. She has a passion for world travel and adventure. So far she has visited 43 countries and speaks 3 languages.
You can reach her at email@example.com