The Rise of Out-of-Pocket Medical Expenses

Over the last decade, medical expenses have skyrocketed. To keep up with expenses and maintain affordable premiums, health insurance carriers have been forced to create coverage options where the consumer can choose to take on additional risk in the form of higher deductibles, copays, and maximum out-of-pocket expenses.

Out-of-pocket expenses are those expenses that the insurance plan doesn’t cover. Depending on the type of insurance plan you purchase, you probably have a deductible and a coinsurance level of payment. When you have a medical claim, the deductible is applied first. This is an out-of-pocket expense payable by you. After the deductible, the insurance company and the insured share a percentage of a certain amount of the claim—called coinsurance—before the insurance company pays the rest of the claim.

Under the Affordable Care Act, which was passed into law in 2010, health plans must now all fall into a four-tier system: platinum, gold, silver, and bronze. The higher the tier, the richer the benefits and the higher the premiums paid for these benefits. Two important factors when choosing a health insurance plan are the monthly premium and the out-of-pocket maximum.

Looking for a catastrophic plan to cover major medical expenses and keep premiums at an affordable level, many take their chances by enrolling in a basic bronze plan, which offers the cheapest premium but has the highest out-of-pocket expense for the insured. If they remain healthy, this plan will save them money. Unfortunately, when a health issue arises, so does the threat of mounting medical bills. Depending on the health issue, the amount owed by the insured can reach into the thousands of dollars. For those on a fixed income and not prepared to meet the financial responsibility, the outcome can be devastating.

With the possibility of this medical debt looming in the distance, some may choose to forgo necessary medical treatment and medications because they can’t afford to pay for them. Still others that cannot go without treatment are being forced to make decisions on how they will pay for the medical treatment they need while still meeting the rest of their monthly living expenses.

If serious injury or illness does strike, and you find yourself facing a mountain of medical bills, don’t panic. Yes, you are responsible for the charges, and you will eventually need to pay them. But there are a few things you can and should do first to make sure that you are only paying what is necessary.

• Review the entire bill – Although there will probably be charges listed that you don’t understand, you will want to make sure you are only being charged for services and supplies that were provided to you. If something looks incorrect or doesn’t make sense, contact the hospital’s business office and ask for an explanation. Errors are much more common than you would expect. If it is determined that an error was made, an adjusted bill should be provided. In some cases, if you report the error to your insurance company, they may give you a monetary reward for helping to reduce the amount of the overall claim. You can also submit any bill above $1,000 for free to HealthJoy to review. If we find an issue, we can even negotiate on your behalf.
• Set up a payment plan – Hospitals want to get paid, so they will work with you to set up monthly payments toward the total bill until it is paid off. Generally, there will be a small monthly finance fee involved, but this will allow you to set up payments that you can afford.
• Negotiate the total amount owed – If you do have a lump sum of money set aside for medical expenses but not enough to pay the entire bill, you may want to ask the hospital if they would be willing to negotiate the total amount of the bill. Setting up financing and monthly billing is an extra expense for the hospital, and if you can pay one large portion of the bill at one time, they may be willing to accept this as full payment.
• Seek out financial assistance – If you are unable to either pay one lump sum or make monthly payments fit into your budget, there are other resources that you can turn to for help. Charitable organizations, such as churches and non-profits, may be able to assist you. You may qualify for assistance based on your income by contacting your state human services offices listed on the following website: https://aphsa.org/

Facing financial challenges brought on by excessive medical expenses can be frightening. It’s important to keep a level head and search for options, solutions, and help if needed. The only thing you cannot do is nothing. Ignoring the bills will only make the situation worse. Make a plan and focus on working to pay down the debt as you are able.