Paying for Unplanned Medical Expenses

Even with a decent health insurance policy, an unexpected medical event could result in costly out-of-pocket expenses. If unforeseen medical costs are in your realm of possibility, consider these steps to position yourself better.

Scrutinize Your Bills
Review every medical bill as soon as it arrives, while your care is still fresh on your mind. If the statement is incorrect or shows only high-level charges, contact the provider and request an itemized bill. The sooner you start communicating with the hospital billing office, the better.

Know Your Coverage
Read your insurance policy closely. If coverage is not clear, call the insurer. Sometimes it’s possible to advocate for coverage that is declined. For example, an insurer might initially decline ambulance transport, but if the patient required IVs and monitors during transport, you might be able to clarify so that they cover the cost.

Negotiate for Discounts and Payment Plans
Don’t delay in asking providers for help. Contact them to request a discount, and don’t be afraid to negotiate. Some healthcare providers offer discounts for cash, allow patients to pay in multiple payments, or offer interest-free payment plans.

Tap into Savings
If you have sufficient funds saved to pay your medical bills and can still maintain three months of savings for emergency expenses, tapping into your savings account might be a viable option. But if doing so will deplete your savings, think twice. Be wary of pulling funds from retirement¹ savings accounts. While it may be tempting, borrowing from a 401(k) will result in a tax bill².

Be Careful with Credit
Paying off medical debt with credit cards is usually not a good option. You’ll likely pay more with interest charges, delay your pay-off date, and negatively impact your credit score. Some medical credit cards do offer brief interest-free periods, but do your research. It’s only a good option if you can pay off the balance before interest begins accruing.

Consider a Personal Loan
Personal loans add debt to your obligation, but your lender might offer competitive interest rates, and a loan is less likely to negatively impact your credit score.

Your best bet is to act swiftly to address your options, avoid unnecessary costs, and protect your credit rating.

1 Non-deposit investment products and services are offered through CUSO Financial Services, L.P. ("CFS"), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. UFCU has contracted with CFS to make non-deposit investment products and services available to credit union members.

2 CFS does not provide tax or legal advice. For such guidance, please consult a tax and/or legal advisor.