5 Ways to Avoid a Ridiculously High Medical Bill

Of all the things that are stressful about personal finance, medical bills might be the worst.
The events leading up to medical bills are difficult if not impossible to predict. On top of that, healthcare pricing is inconsistent, medical bills are often inaccurate and a lot of people have trouble understanding their health insurance coverage. And if you think it’s something you don’t need to worry about, consider this: About a quarter (26%) of people ages 18 to 64 said they or someone in their home had trouble paying medical bills in the last 12 months, according to a nationally representative survey conducted by the Kaiser Family Foundation and the New York Times from Aug. 28 through Sept. 28, 2015.
Medical expenses are undeniably burdensome and difficult to plan for, but that’s exactly why it’s important to try. We asked some medical billing experts to share their top tips for consumers who want to be prepared for whatever their healthcare providers send them in the mail.

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1. Know Your Coverage — & Prioritize Health Savings
Managing medical expenses starts before you get sick or injured. The first place to direct your attention is your health insurance.
“Know your insurance policy inside and out,” said Sarah O’Leary, founder and CEO of ExHale Healthcare Advocates. “The best way to avoid getting overcharged is to know your coverage! Demand 100% of the coverage you’ve paid for – nothing less.”
Even with insurance, you’re likely to have some responsibility for the bills. You can work healthcare costs into your monthly budget, allocate some of your savings for unexpected medical bills or use a tax-advantaged tool like a flexible spending account (FSA) or health savings account (HSA) to cover such bills. (You can find a everything you need to know about HSAs right here.) 
Remember to re-evaluate your coverage and review your health insurance contributions (noted in your paycheck) during open enrollment to make sure your policy suits your needs and your budget. A thorough understanding of your insurance coverage and what you need to save to cover the gaps can make it much easier to absorb the costs of any future medical bills.
2. Get Everything in Writing
When it comes time to actually go to the doctor, ask a lot of questions and get as many details as possible before receiving any treatment. Just like anything else you spend your money on, getting quality, affordable healthcare requires some legwork on the part of the consumer.
“Shop around the cost of your care,” O’Leary said. “An MRI on one side of Main Street might be $3,000, and on the other $300. You can save thousands by shopping around all aspects of your care – doctor visits, lab work, tests, and the costs of non-emergency procedures. Even shopping prescription drug costs can save you money. Negotiate the price with your healthcare provider(s) and get the agreed upon amount in writing.”
Adria Goldman Gross, who runs MedWise Insurance Advocacy in Monroe, New York, also emphasized the importance of written estimates: “Whatever agreed fee amount you have with your medical provider, make sure you have it in writing.”
And as important as it is to get as much information as possible from potential providers, don’t forget to run things by your insurance company. “Make certain you have all necessary pre-approvals from your insurer prior to the test/procedure,” O’Leary said. “If you don’t get proper approvals, the insurer may refuse to pay the claim.”
3. Double Check the Bill
Once you’ve gotten treatment, pay close attention to the paperwork.
“About 80% of all medical bills have errors,” Gross said. (O’Leary said about 60% to 80% of bills have errors.) “I recommend people examine them thoroughly and make sure that they’re not overcharged. On the internet, with some research, people can find usual, reasonable and customary charges for the procedure codes of which they are being billed.”
4. Ask for a Payment Plan
The minute you get an accurate medical bill and realize you can’t afford it, reach out to the healthcare provider.
“In most cases, the healthcare provider will be open to setting up a monthly payment plan with the patient,” O’Leary said. “It doesn’t do them any good to have a patient file for bankruptcy, nor is it to their advantage to hand it over to a debt collections agency.”
5. Make a Backup Plan
If for some reason you can’t work out a payment plan or your budget or emergency savings aren’t enough to help you cover a medical expense, you could consider using a balance-transfer credit card to cover the bill. These cards tout 0% introductory annual percentage rates (APRs) that let you skip the interest for a set period of time. Another emergency funding option? A low-interest personal loan. You can learn more about their pros and cons in our loan learning center. 
Image: didesign021

The post 5 Ways to Avoid a Ridiculously High Medical Bill appeared first on Credit.com.
Source: Ramsey Debt Relief Feed 1

5 Ever-So-Simple Strategies for Paying Off Debt in 2017

Want to pay off your debt and save more money in 2017? You’re not alone! According to one survey of Google search data, searches for “Spend Less/Save More” were up 17.47% from 2016. Want to achieve your get-out-of-debt goal? If so, we recommend trying one of the five strategies here.
1. The Debt Snowball
This debt-payoff method, made famous by financial guru Dave Ramsey, has you pay off your smallest debts first. The idea behind the debt snowball is that you get a quick psychological boost from paying off some small debts from the get-go. This gives you the mental momentum to keep going when paying off debt.
To start a debt snowball, list your debts in order from smallest to largest. Use any extra money to pay off the smallest balance while you make minimum payments on your other debts. When your smallest debt is paid off, snowball that debt’s minimum payment, plus your extra cash towards paying off the next debt. By the time you get to the largest debt, you’ll be throwing a lot of money at it each month. (You can see how your debt is affecting your credit by viewing two of your credit scores, with updates every 14 days, on Credit.com.)

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2. The Debt Avalanche
This is similar to the debt snowball in that you pay off one debt at a time. But it’s actually the more economical method of paying off debt. Instead of paying off smaller balances first, the debt avalanche has you start by paying off the debts with the largest interest rate.
The debt avalanche is a smart method if you already have the determination to make it through a long debt payoff process without the boost of paying off a few smaller debts early on. It can get you out of debt faster since you’ll stop accumulating interest on high-interest debts much more quickly.
3. The Debt Snowflake
This is a method that can be combined with one of the above options or used to pay off debt in any order you choose. The idea here is that you find small ways to save a few bucks, and then transfer that money saved toward debt payments.
With the debt snowflake method, you’ll need to be exceptionally aware of your spending patterns. For instance, if you normally spend $10 on a lunch out at work, but pack your lunch one day, you could save $5. That $5 is a snowflake that can then go toward paying off debt.
The key to debt snowflakes is to make sure they don’t “melt.” Get into the habit of transferring “snowflake” money to debt accounts immediately, or at least on a weekly basis. Otherwise, you run the risk of that hard-saved cash being used for other purposes.
4. The Credit Card Transfer
If much of your debt is in the form of high-interest credit card balances, consider using balance transfer offers to pay off that debt more quickly. Since credit cards often have interest exceeding 15%, it’s not unusual for most of your minimum payment to go toward interest, even on a relatively small balance. If you can transfer that balance to a card with a 0% introductory annual percentage rate, you can put more money toward the principal balance each month, paying off your debts more quickly.
Be careful, though, to read all the terms of a credit card balance transfer. Most cards charge a fee for the balance transfer. If you’ll pay off the card’s balance quickly, the transfer may actually cost more than it saves. You can find more info on some of the better balance transfer credit cards here.
5. The Half Payment Method
What if you’re on such a tight budget that you can’t even squeak out some extra dollars to start on a debt snowball or avalanche? One option is to start making half of your minimum payment every two weeks. Bi-weekly payments, which may fall when you get a paycheck, can save you money over time on debts that are compounded daily or monthly based on the average balance.
The reasoning behind biweekly payments is somewhat complex. But, essentially, paying more often allows less interest to accrue between payments, which means more of your payment goes toward the principal. Plus, if you make a half payment every two weeks, you’ll actually have made a whole extra minimum payment by the end of the year!
Half payments can help even out your bank account balance and can help bring down your debt balances more quickly. Combining the bi-weekly payment method with another method for applying any extra cash you scrape together toward one debt at a time could be a powerful option for meeting your financial resolution this year.
Image: FatCamera

The post 5 Ever-So-Simple Strategies for Paying Off Debt in 2017 appeared first on Credit.com.
Source: Ramsey Debt Relief Feed 1

This Trick Will Help You Finally Pay Off Your Credit Card Debt

In 2017, one-in-four Americans say they’re thinking about money more than just about anything else. Does that sound like you? One of the best ways to clear some of your head space may be to pay down credit card debt. Less debt means fewer minimum payments, which means an easier time managing your day-to-day cash flow.
That’s not the only benefit of paying off credit card debt early either. With annual percentage rates (APRs) in excess of 15%, credit cards can cost you a big chunk of change in interest. Plus, high credit card balances can do big damage to your credit. (You can see the effect of your current balances by viewing two of your free credit scores, updated every 14 days, on Credit.com.)

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A Big Trick for Paying Off Credit Card Debt
Paying off credit cards takes planning and discipline. But you can also use a few tricks to make the process easier.
One big trick to make paying off credit card debt both easier and faster is using 0% APR balance transfer offers. It’s a simple strategy that can save you hundreds, or even thousands, in interest, not to mention allows you to potentially pay off your debt sooner.
You’ve got to leverage the offer correctly, however. Here are the basic steps to using this strategy.

Apply for a card with a 0% introductory APR offer on balance transfers.
Move some or all of your balance from an interest-bearing card to the card with the 0% APR. (Wondering what card to use? You can view our picks for the best balance transfer cards here.)
Pay down that card as quickly as you can.
If the card still has a balance when the introductory offer is up, consider applying for another 0% introductory APR card, and transfer the balance again. (More on this in a minute.)

That’s the gist of the strategy. It’s a great option for those with credit high enough to qualify for 0% introductory APR offers. Before you dive in, though, read through these additional tips and tricks.
1. Watch the Balance Transfer Fees
First off, it’s essential that you look at and understand balance transfer fees. Most balance transfer deals come with an upfront fee that gets tacked onto your balance once you make the transfer. This is how credit card companies come out on top with balance transfer deals.
Many times, transferring the balance to the 0% interest card will still save you money. But that may not be the case if you’re transferring a relatively small balance or if you’ll pay off the debt quickly either way.
To know whether or not a balance transfer will save you money, you’ll need to calculate your break-even point. First, estimate how many months it will take you to pay off the transferrable balance. Then, figure out how much interest you’d pay in that period of time if you did not transfer the balance. Finally, calculate the total fee you’d pay on the balance transfer.
If the balance transfer fee is more than the interest you’d pay in your current situation, it’s not worth your while.
2. Keep Track of Timing
Because balance transfer deals typically last between six and 18 months, you’ll need to keep careful track of when each introductory offer ends. If you’re running multiple balance transfer offers to pay off a lot of debt, keep a spreadsheet of offer end dates, current APRs, and future APRs once the offer is up.
Have a look at your spreadsheet each month. When a card’s offer period is about to end, decide whether to roll the remaining balance to a new balance transfer deal, or to leave it where it’s at.
Remember, it’s in your best interest to pay your transferred debt off in full by the time the 0% introductory offers expires. While you could potentially move the debt to another balance-transfer credit card, you’ll likely have to pay another fee. Plus, you’ll incur another hard inquiry on your credit report, which could ding your credit score. That’s why the next step is particularly important.
3. Know Your Credit Situation
This debt payoff strategy won’t work for everyone. You’ll likely only qualify for good balance transfer deals if you have good credit in the first place. And it’s difficult to say for sure how this scheme will affect your score.
On one hand, the hard inquiries generated by additional credit card applications will ding your score. But having a higher overall credit limit will improve it. These two may balance one another out over time.
The key is to keep track of your credit score throughout this process. If your score isn’t currently high enough to qualify for a 0% introductory APR deal, you may want to take time to polish up your credit before you apply.
4. Don’t Add New Debt
The number one key to making this strategy work for you is to not add any new debt. If you can’t avoid temptation to spend because you now have more available credit, you’ll just add to your mountain of credit card debt. One option is to shred your cards, even if you don’t close your accounts. This makes it harder to impulse spend on those cards that now have no balance once you’ve completed the transfer.
As long as you keep from adding new debt and follow the steps outlined here, 2017 could be a great year for getting free from debt.
Image: laflor

The post This Trick Will Help You Finally Pay Off Your Credit Card Debt appeared first on Credit.com.
Source: Ramsey Debt Relief Feed 1

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