Millions of Americans are covered by health insurance, but still face mountains of medical debt. While health insurance is supposed to cover protection, nearly 75 percent of people who file for bankruptcy do so because of medical debt. Even with health insurance, coverage can be capped. In Austin, Texas, 64-year-old Lawrence Yurdin amassed $150,000 in hospital bills, but his insurance only covered $10,000. To avoid a similar situation and minimize the risk of medical debt, it’s important to choose your health insurance provider wisely.
Prevent Medical Debt
By choosing a quality health insurance provider, you’re insuring both your physical and financial health. With a plethora of available options on the market, however, it can be difficult to determine which provider is best for you. Since medical calamity can cause medical debt and in-turn bankruptcy, be sure to fully consider the possible options.
- Choose which plan best fits your needs. There’s no sense in paying for a plan that provides too much or too little coverage for you and your family. All insurance plans fall under three main umbrellas.
- HMO: Health Maintenance Organizations
- PPO: Preferred Provider Organizations
- POS: Point of Service Plans
- Stay up-to-date with the terms of service. If you already have health insurance, be sure to identify and review changes to your policy before re-enrolling. Often times, people renew their plans without knowing the changes. Not knowing about any changes in your coverage plan could lead to medical debt in the future.
- Consider a health savings account. If you and your family only use your insurance once or twice a year, a health savings account might be the best option for your financial health. With a high deductible but low premiums, you can use the money you would have spent on premiums to bulk up your HSA. Having money saved for medical emergencies reduces the likelihood of a bankruptcy due to medical debt.