Ask The Money Coach

Posts Tagged ‘Insurance’

It will take multiple steps to help you eliminate your medical debt. But here are six strategies you can use to knock down those hospital bills and improve your credit rating.

Examine Everything

Start by going over all your medical bills with a fine-tooth comb. Question charges that seem inflated (like that $20 bottle of aspirin). Also, ask for explanations from your healthcare providers regarding invoices for services you don’t recognize or understand. Simply forcing them to account for everything may result is certain charges being waived or reduced.

Find Out About State Freebies

Lots of states offer their residents free mandatory coverage or health insurance with small co-pays and low deductibles. If any of your treatment should have been covered by a state program, see if state resources can fill the gap and pay what you’ve been charged.

Ask Directly for Discounts

Ask the hospitals, clinics and healthcare professionals that serviced you whether or not you qualify for any discounts, charity, or write-downs of your total bill outstanding. Don’t be ashamed to let the hospital(s) know about your entire financial predicament. They may be more lenient if they know that you’re not working, are not insured, have lots of other debts, are a single mom, etc.

Request a Payment Plan

If you can talk to a kindly, flexible billing representative/hospital administrator, or even better, the doctor(s) who treated you, ask if you can get on a payment plan. Try to stretch out the plan for as long as reasonable in order to give yourself time to pay off all that you owe. If they agree to discount $2,000 of your original $5,000 in bills, then you’ll have $3,000 remaining to pay off over time. If you can commit to pay that off in two years, that means you’ll have to pay $125 a month ($3,000 divided by 24 months).

Negotiate to Improve Your Credit Rating

Also, while you are negotiating, request upfront that the hospital agree to delete all negative references to your credit files. They may only do it once you’ve completed your repayment plan. But that’s better than letting the late payment or collection information sit on your credit reports for seven years. Get any agreements in writing.

Get a Medical Advocate

Don’t give up on negotiating down that medical debt, or to improve your credit standing. Sometimes you have to go to multiple people or write numerous letters. But it will be worth it in the end if you can rid yourself of thousands of dollars of medical bills. If your own efforts don’t get you anywhere, get help from a third party, such as Access Project (http://www.accessproject.org) or Medical Bill Advocates (http://www.billadvocates.com). For those with hefty hospital bills, The Access Project’s Medical Debt Resolution Program can guide you through the maze of negotiating with insurance companies, medical providers and public programs to resolve your medical debt.

With medical collection activity on the rise, it is definitely possible that a hospital, clinic or healthcare provider could come after you to pay off healthcare bills incurred by your former spouse. In fact, in many states, healthcare providers use common law doctrines to force spouses of patients to pay outstanding medical debts. Even if you don’t live in a common law state, many states consider a wife or husband responsible for a spouse’s medical bills, provided the two were living together when the medical bills were generated. That’s the case in New Jersey, where I live. Here, the Supreme Court has ruled that both spouses are liable for the “necessary” expenses incurred by the other while living together; and medical services are considered “necessaries.”

Fortunately, there are some efforts underway to safeguard spouses (and ex-spouses) when a wife or husband has racked up big medical bills. For example, many consumer protection agencies advocate exempting spouses from medical debts altogether.

What Your Former Spouse Should Do

Meantime, to protect yourself, talk to your former wife (if that’s possible) and encourage her to set up a repayment plan for her medical debt. Suggest that she review her medical bills closely to make sure she wasn’t overcharged or double-billed for anything. And share with her the resources listed below. Ultimately, of course, what your ex-spouse does or does not do is out of your control. But here’s what you can control.

How to Protect Yourself

First off, keep close tabs on your own credit files. Signing up for a good credit monitoring service is a way to do this. (I use credit monitoring from FreeCreditReport.com and myFICO.com). Unpaid medical bills don’t usually appear in your credit reports. But if they go into collections, then those accounts will be listed in your Equifax, Experian and TransUnion credit files. So be especially watchful for any collection accounts that may pop up in the future that you might have to dispute. The Federal Reserve reports that more than 50% of collection records and 20% of lawsuits that appear on credit reports are due to medical debts.

Aside from monitoring your credit, you should contact your health insurance company to inquire about any medical invoices that they didn’t pay. Perhaps there was an oversight, a missing claims form, or simply some information that you can supply that would cause the insurer to cover some of the outstanding healthcare bills.

Know the Worst-Case Scenario

Also, examine any of her healthcare bills you may have copies of – to see if there were clauses or fine print that obligated you or her (or both of you) to pay whatever was not covered by insurance. Sometimes, healthcare providers will spell out what recourse they may pursue in the event of non-payment. Aside from damaging your credit will collections, judgments or lawsuits, healthcare providers may try to garnish wages, seize assets or put a lien against your home. These are extreme tactics, and will certainly not be used in every case. But you need to be aware of all possibilities. In the end, how aggressively a healthcare provider pursues a debt will largely depend on the laws in your state, the amount of debt owed, and the extent to which the provider thinks they can shake money out your or your ex spouse.

Resources for More Help

Lastly, if you do get socked with your former spouse’s medical bills in the future, reach out to a variety of consumer organizations that can help you with this issue. Some groups that have fought wrongful medical billing practices include:

Access Project             http://www.accessproject.org

Bill Advocates              http://www.billadvocates.com

Consumers Union         http://www.consumersunion.org

Hospital Debt Justice    http://www.hospitaldebtjustice.org

National Consumer Law Center            http://www.consumerlaw.org

Considering how widespread identity theft has become (claiming 10 million victims annually in the U.S. alone), it may be a good idea to purchase identity theft insurance. A handful of insurance companies nationwide offer this coverage. Since the average victim of identity theft spends about 200 hours and $1,000 cleaning up the mess brought on by this heinous crime, identity theft insurance reimburses you for a range of things like attorney’s fees, phone bills, and time lost from your job. Coverage usually goes up to around $25,000. Also, some credit monitoring services also include identity theft insurance coverage.

Consider Buying ID Theft Insurance

Buying any form of insurance is really all about the numbers. The same is true for life insurance, health insurance, car insurance, and yes, even identity theft insurance. When you purchase insurance, you’re making a calculated decision. You’re betting, essentially, that a given peril (such as having a car accident or being victimized by identity theft) may in fact happen to you (although you’re hoping that it won’t). The insurance company that sells you the insurance is making a bet too. They’re betting that the danger or peril in question won’t, in fact, happen to you (and they’re hoping it won’t also). At the very least, they’re happing that a specific danger won’t happen to too many of their insured clients. Despite the odds of something happening or not happening, insurance companies know that in any given year, for any type of insurance, they’re going to pay out a certain number of claims. The two big questions really are: who will file a claim and how much of a payout will that person be seeking? When it comes to identity theft, it’s almost a crap shoot on that first question.

Identity Theft Can Strike Anyone – Even the Rich and Famous

Anyone can be struck by identity theft, from the anonymous “Average Joe” to well-known celebrities and very rich individuals. Some famous people who have been victims of identity theft include:

• Ben Bernanke, the chairman of the Federal Reserve Board
• Warren Buffett, the billionaire investor and head of Berkshire Hathaway
• Tommy Hilfiger, the clothing designer and fashion guru
• J.K. Rowling, the author of the Harry Potter book series
• Oprah Winfrey, the popular talk show host and media mogul
• Tiger Woods, the professional golf legend

The Odds Are You May Be Victimized Too

Clearly, identity theft is an equal opportunity hazard confronting us all. Concerning that second question, about how much in claims will be paid out, insurers have a bit more insight. If the numbers on identity theft are to be believed, and current wisdom has it that about 10 million Americans succumb to identity theft each year, then that suggests the average person has a 3% chance of becoming an identity theft victim in any given year. So far, the “odds” work in the insurance company’s favor. But when looking at those numbers over time, the numbers change exponentially. Those 3% odds grow dramatically each year, magnifying the likelihood of being struck by identity theft over a span of, say, 20 or 30 years. In other words, the odds are that you will, at some point, be hit by identity theft. If and when it happens, that coverage could prove invaluable.

Getting Help in the Aftermath of Identity Theft

Hopefully, you’ll never be ensnared by the heinous crime of identity theft. If you are the victim of identity theft, however, act immediately. Alert the credit bureaus so they can put a notice in your credit files. Notify your local police department, so that you have a record of the contact the Federal Trade Commission (877-ID-THEFT or www.ftc.gov), and seek help from the Identity Theft Resource Center (858-693-7935 or www.idtheftresource.org) in San Diego.

Many people don’t realize that doctors are willing to negotiate costs with patients who don’t have healthcare coverage. Consumers can also use the strategies below if they have outstanding medical debts, or are planning to have a medical procedure, but they know that specific procedure won’t be covered by insurance. Follow the following five steps to lower your medical bills:

1. Ask the right person for a discount. This is almost always the doctor herself. Not the office manager or the secretary at the front desk who might schedule your next appointment. Instead, let your doctor know if you’re uninsured or if your healthcare company won’t cover certain procedures. Say: “Doctor, I really want to have this procedure done, but I’m afraid that I won’t be able to afford it, since my insurer won’t cover the cost. Can you work with me on my bill so I can get the care that I need?”

2. Be flexible and open-minded. Don’t make it seem like you’re just trying to weasel out of paying. Let the doctor know that you understand her situation too. She’s working hard and deserves to be fairly compensated. So indicate flexibility and a willingness to work out a reasonable deal. For example, if a doctor can’t offer you a significant price break ask: “At the very least, can I establish a payment plan with your office to pay this bill over one year or some agreed-upon time frame?”

3. Arm yourself with information. Before having any kind of check-up, exam, surgery or medical procedure, you should know the going rates for such services. Hospitals often will slash your bill from full-price to what they charge Medicare, since that’s seen as a benchmark for costs. Look up Medicare reimbursement rates on the Center for Medicare & Medicaid Services web site at: http://www.cms.hhs.gov. With this knowledge, you can ask for a significant price reduction. The same thing applies to old medical bills that are past due. The reason: Insurance companies typically pay out only one-third to one-half of what they’re billed by doctors, hospitals and clinics. Why should you pay more than insurers pay?

4. Use cash as leverage. Assume a doctor normally bills $150 for a routine physical, it would not be unreasonable to say: “I believe your insurance rate for physicals is $150. Is it possible for me to pay $75 if I pay in cash today?” You may not get a whopping 50% off your doctor’s bills. But even a 25% to 30% discount would be a welcome price break.

5. Hire a Medical Advocate

If your own efforts at getting a hospital or healthcare provider to reduce a medical bill prove unsuccessful, (perhaps because the hospital is demanding a lump sum payment), a qualified medical advocacy agency will likely be able to convince the hospital to accept a payment plan. For help, contact: Medical Billing Advocates of America (www.billadvocates.com), which has specialists all across the country to help patients deal with health-related bills.

Medical bills are the leading cause of bankruptcy in America. Don’t let unpaid medical debt – large or small – hurt your finances and jeopardize your credit rating. Take action today to knock out those medical bills and restore yourself to financial health.

Q: It’s open enrollment season for health insurance. What should I compare policies on to make sure I get the best one for the price?

A: Generally, you want to look at price, coverage, and ease of use. Clearly, affordability should weigh heavily in your decision, but don’t let that be the sole criteria. If you have a preferred doctor, make sure he or she accepts the plan you’re considering. Also, look at the prescription drug costs in the plan, the deductible you have to pay before benefits kick in, and the overall amount you can be expected to shell out in any given year…

Read the rest of this post on Health.com

Optimize Your Health Insurance Plan – Healthy Living – Health.com.