Cost of medical treatment for your better health can be very high. To ensure that physical, as well as mental health, is retained you must pay it off on time if not early. However, once you take on medical debt, there is no need to panic. The best way is to treat it just like any other debt. You must decide on a plan to tackle it and work on your necessary payments.
You will have to make a proper budget and may even have to cut down a few unnecessary and discretionary spending. Such planning will help you to free up some cash to pay your medical bills and at the same time, you will be able to take care of the other debts. If you have a credit card debt you should consider settling it as these are high-interest debts. It will help you to have extra money in your hand to put toward your medical bills.
Any debt whether it is medical or credit card will hurt you where it hurts: with your credit. Of course, you can always settle your medical debts as well. When you face high medical bills, you may feel that it is best to pay it off with your credit card but there are other smart alternatives as well that will offer better protection. The best alternative is to discuss it with the office of the medical practitioner and find out if there is an opportunity to settle your bill for a lesser amount than you actually owe. Before you do that make sure that you have reviewed the bill and have removed any errors in it.
Settling medical debt
You must know that medical debts are different from other debts such as credit card debt that is usually set in stone. Therefore, you can easily approach the medical facility for a settlement negotiation which most facilities encourage. Paying off lower than the final amount owed is much better than falling behind the dues and eventually not pay and have a serious impact on your credit report.
If you can afford then by offering to pay your medical debt with a reasonable amount in a single payment will provide the most flexibility. Settling a medical debt is in no way different from settling any other type of debt.
You can do it yourself or work with someone else. There are several debt settlement companies that will work on your behalf. You can click here to know more about debt settlement companies and their working process.
- They will contact the doctor or hospital
- They will even the collection agency if your account is given to them for collection
- They will begin negotiations and will often be successful to make the creditor agree to accept a lower amount than your balance
- They will ask you to create an escrow account to deposit a fixed amount every month to amass the settlement amount agreed and
- Finally, pay off the medical debt.
The professional debt settlement firm will have experienced debt specialists to make the settlement offer and decide the amount of settlement according to your affordability. These professionals are well-versed with the negotiating tactics with creditors.
However, experts advise that you start the settlement process as early as possible to prevent the health care provider hand over your account to the debt collection company. This is because a collection agency will significantly have less motivation to settle your account than the doctor or the hospital would. There are two reasons for it:
- The debt settlement companies usually work on a commission basis at a rate calculated on the total amount collected and will surely not want a lower payment resulting in lower commission and
- The doctor or the hospital will want to recover as much as possible without having to pay any commission to the debt collection agency resulting in the further loss.
The medical facilities will work with you even if you need a payment plan and sort out the issue with a monthly amount that you can easily afford.
Choose different options
You may also look for different payment options offered by most healthcare providers. These options include:
- Low-interest payments: In comparison to the rate of interest on a credit card, a low interest will be helpful if you cannot pay the medical bill off in full.
- Agreed-to amounts: There are many healthcare providers who will work with their patients to find a monthly amount that will fit in with their budget and affordability. This will not create any financial flags on your credit report.
In addition to helping you’re out with your medical debt, these options will not fetch any late fees as it would in your credit card bill if you cannot pay or anything goes awry. Therefore, there will be no dings on your credit report.
Moreover, paid medical bills usually do not appear on your credit report primarily because hospitals do not report these unpaid bills to the credit agencies. However, if you do not pay your medical bills for a certain period of time, the same hospital may turn your account over to a collection agency and this is when your medical debt will impact your credit with a 50 to 100 point drop in it.
Therefore, choosing a suitable option to settle your medical debt is the most prudent decision to keep your FICO score healthy. Credit is very important for your everyday needs. A good and solid credit score will ensure that you have all available options open just when you need them and along with that, you can save money on interest and fees.
While dealing with your medical bills:
- Review your options carefully
- Deciding how to repay
- Review bills for accuracy
- Check for services offered and billing codes
- Review Explanation of Benefits of an insurance company to know the amount you owe
- Take help of professional during the negotiation
- Ask about payment plan options and
- Avoid using credit cards for payment of medical bills.
Remember, today’s choices will have a huge impact on your health and future.