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How to Avoid Medical Debt

 “Accidents will occur in the best-regulated families,” said Charles Dickens. Same goes for disease, illness, childbirth, doctor visits—truth is, most of us will go to a hospital or doctor at some point, no matter how healthy we are. But while we can’t avoid needing health care, we can avoid getting into debt for it. 

Get health care
This is probably the best way to avoid debt: don’t get into it in the first place. Paying some money every month is better than being up to your eyeballs suddenly in unexpected bills. But even if you have health care, those deductibles, co-pays and uncovered expenses can add up—so read on.

Save to save
It’s hard to put money aside when you’re just squeaking by as it is, but an emergency health fund may ultimately save the day. Even if you have health insurance (which we highly recommend), your emergency fund will come in handy for out-of-pocket fees, deductibles and co-pays. Nolo Press, a publishing company devoted to DIY law, has some good tips for setting up an emergency fund.

Health Savings Accounts (HSAs)
HSAs were introduced in 2003 as a way to help people save for medical care. Much like an FSA (Flexible Spending Account), an HSA account takes money from your paycheck before taxes. (You can also open an individual HSA instead of going through your employer.) These accounts are tax deductible, tax free and tax deferred. The funds also roll over at the end of the year, instead of being forfeited like funds in an FSA. Keep in mind, though, that you must have a high-deductible healthcare plan to qualify for an HSA.

Is your doctor in?
Make sure the doctor you’re seeing is in your network. Not all doctors will refer you to someone in network, so double check that referral before you go (and pay).

Prescription for savings
Often, your doctor will send you to the hospital pharmacy to pick up your prescription. Don’t follow that instruction blindly: ask about generic medications. If your hospital doesn’t have them, try a chain pharmacy instead. When you’re not paying for a name brand, you’ll pay less for the exact same product. (If you’re still not convinced that generic drugs are just as effective as name brands, check out this reassurance from the U.S. Food and Drug Administration.)

Should you err on the side of the ER?
If you’re seriously hurt, GO DIRECTLY TO THE ER (we’re talking chest pain, breathing problems, sudden numbness, difficult speaking, excessive bleeding, loss of consciousness, broken bones—you get the idea). Your life and health is not something to procrastinate. BUT: if you’re pretty sure you can wait until your doctor’s office hours, you’ll save a bundle. ERs can be pricey and they’re not always covered by health insurance. 

Don’t rely on credit
Avoid using a credit card to pay for medical debt. It may be tempting to get those collectors off your back (and off your phone), but don’t give in. Also avoid credit cards that market themselves as a way to pay for medical expenses (typically bills that aren’t covered by insurance, such as elective procedures or deductibles). This is the medical providers’ attempt to stop bills from going into collections. Be savvy: these “deals” often have retroactive interest rates and skyrocketing APRs, facts that you might not notice when you’re vulnerable. Use credit cards very, very wisely. You’ll find lots more on medical credit cards here.

Hopefully, these quick tips will help you steer clear of medical debt if you’re sick or injured. Whatever happens, remember to put your health first. But if you can preserve your financial health at the same time, you’ll definitely rest easier! 

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