Medical Debt – Complete Guide On Dealing With Unexpected Medical Expenses

Healthcare is something you can’t always do without. If you find yourself in an emergency and needing care, you might face unexpected medical debt or out of pocket costs. 

While planning for the unexpected is key, not everyone has an emergency fund just in case. In addition, you don’t always know what type of care or procedures you’ll need. Because of this, some things might not be covered by your health fund and Medicare. Anything leftover comes out of your pocket. 

What do you do if you find yourself facing unexpected medical expenses? Better yet, what happens if you can’t afford these costs? The good news is you have more options than you think. Here’s the complete guide on dealing with unexpected medical expenses no matter what situation you find yourself in. 

What Are Out of Pocket Fees?

There’s a lot of confusion over what an out of pocket fee even is. An out of pocket cost is any difference between the amount a doctor charges for a medical service and what Medicare and any private insurance pay. These are also called gap or patient payments. 

While costs for most private treatments are usually fully covered by Medicare and private insurance, you might still have out of pocket costs if you’re treated as a private patient in a private or public hospital. In this case, you could have to pay for specific doctors or hospital charges. 

If you get any medical services outside of a hospital, like diagnostic tests, or at a private hospital emergency department, this could also be an additional expense. Being aware of these out of pocket costs that can lead to a medical debt is key to staying prepared, but sometimes you’re still caught off guard with unexpected medical expenses. In that case, follow these steps below.

1. Review Your Procedure’s Item Number

One of the first things to do is to get what’s known as the Medicare item number. You can get this in advance of your first visit to your health provider, but they can also provide it at any time. This is how you’ll compare fees. 

Everything covered by Medicare has an item number. You can find a full list of these numbers online. When you have this procedure item number, you can look up the specific medicare repeat. Subtract the rebate number from the specialist’s fee and see if there’s any gap you might need to pay in this service. 

Remember to include any extras in your calculations. Things like blood work, booking fees, etc. can all add up, so check this as well. While it might seem like an extra step, the more informed you are about how much you’re being charged, the better. 

2. Keep Strong Records

Staying on top of your budget is a must not only for your daily life, but also when it comes to medical expenses. Paperwork adds up quickly in the hospital or if you’re being treated for something extensive, so keep everything organised in one place. 

Include things like quotes, item numbers, and all details of your hospital stay or treatment. Having all of these organised and in one place ensures you won’t pay for anything extra by accident. While most hospitals and healthcare providers take great care to ensure their documents are kept in order, it’s always good to double-check. 

3. Communicate with Care Providers

If you’ve received an unexpected medical expense, communicate with your healthcare providers. If you have private insurance, call them first. Ask them what isn’t covered and why. The insurance company might be able to negotiate on your behalf with the service provider, so it’s always worth discussing your options. 

You can also speak to the care provider directly. If you have an unexpected balance, they might be able to charge you a different, lowered rater or negotiate this down depending on the situation. Hospitals and medical care centres typically have a department specifically for this. 

4. Ask for Financial Aid

A lot of people are surprised to learn that they don’t need to pay all of their unexpected medical costs at once. Even if the charges are determined to be valid, you don’t need to come up with a large chunk of cash at once. 

Again, this is the time to talk to your care provider. Ask if they have a payment plan or financial aid available for cases of medical debt. There might be charity programs to assist with keeping the costs down if you’re unable to pay. They also should have a low or no-interest payment plan for those in this situation. 

Remember, these service providers want to get paid. It’s in their best interest to work with you, no matter your credit rating or history. If you’re unable to pay, let them know and be open with your provider about your current financial situation. 

5. Create a Plan

Once you’ve spoken to your private health insurance (if applicable) and your healthcare provider, it’s time to create a plan. By this point, you should know how much you need to pay on a monthly basis or how much you owe overall. 

From there, create a new budget that fits this payment into your current routine. Remember, you’re not in this alone. If you’re struggling to make ends meet, you might need a different payment arrangement, or it might be time to work with a professional. The experienced experts at Debt Busters can help you create a budget that fits your unexpected medical bills so you can stay on your own financial footing. 

How to Avoid an Unexpected Medical Debt

Surprise medical bills are more common than you think, but that doesn’t mean they’re inevitable. You can take a few key steps now to avoid an unexpected medical bill or extra out of pocket costs. 

You can avoid unexpected fees by taking these steps:

  • MBS Item Numbers – As mentioned above, you can always ask to review the MBS item numbers for any services. Look up the charges for said services in advance to compare with your insurance and Medicare coverage. 
  • Gap Cover – If you have private insurance that participates in a gap cover scheme, is your doctor covered? 
  • Other Doctors – Will you be covered by any additional doctors for your treatment? These might fall outside of your coverage, so it’s important to know who will be involved before you begin. 
  • Written Estimate – Always ask for a written estimate of services and costs before you agree to a treatment, if possible. Feel free to review these estimates with your insurance, care provider, and Medicare. 
  • Billing Terms – Last but not least, familiarise yourself with the billing process of your care provider. How will they bill you and when will you need to pay?

If you’re unable to afford your estimate, you still have options. You might be able to be treated at a public hospital as a public patient. You can also talk to your doctor about alternative treatment options that might be a better fit for your budget. However, your health should always come first. 

Know Your Rights When It Comes To Medical Debt

If you’re not able to negotiate any type of arrangement with your doctor after receiving a treatment you can’t afford, it’s important to know your rights. If you have reason to believe you deserve special consideration or that you’ve been misled, you should contact the health complaints agency in your state or territory. 

Otherwise, you should be prepared to accept a reasonable payment plan for your unexpected medical expenses. The keyword here is reasonable. You should only pay what you can reasonably afford, and you shouldn’t need to bend your budget too intensely to afford your medical bills. 

In Australia, you have a right to affordable healthcare. Knowing your options, your rights, and the costs beforehand is the best way to ensure you’re not hit with an unexpected medical bill. However, things sometimes happen. Keeping a level head and navigating these challenges with patience will go a long way towards lowering your overall costs. 

Preparing for the Unexpected: Medical Expenses

The best strategy to take with all things in life is preparedness. There’s no way to know for sure what tomorrow will bring. From facing global pandemics to planning for retirement, it’s always better to be safe than sorry. Saving today for a rainy day could save you big if you find yourself facing unexpected medical expenses. 

Have you found yourself facing an out of pocket cost for healthcare? If so, you’re not alone. You don’t have to pay more than you can afford, whether you’ve already received your service or you’re still waiting. As you can see from the guide above, you have more options than you think. From talking to your healthcare provider to learning more about payment plans, talk to us if you feel pressured to break your budget for an unexpected medical expense. 

If you’re unsure how to prepare your budget for the future, talk to the experts at Debt Busters on 1300 368 322. We have over 15 years of experience helping Aussies navigate everything from budgeting to medical savings. We’re here to help every step of the way. 

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