No expenditure can hurl you toward financial ruin as quickly as medical bills. Medical debt is a major factor in the filing of consumer bankruptcies. And it often invades your life when you least expect it.
But you can take steps to keep your medical bills from getting out of hand.
"The best thing to do is to be prepared to the best of your ability," said Susan Sylvest, certified financial planner at Murphy & Sylvest in Dallas. "Understand what your insurance will and will not cover."
Here's what Sylvest and other experts say you need to know:
Stay in network.
Your insurance plan contracts with a range of doctors, hospitals, labs, radiology facilities and pharmacies. These health care providers are part of your plan's network and have agreed to accept your plan's contracted rate as payment in full for services.
The rate includes both your insurer's share of the cost and your share. Your share may be in the form of a co-payment, deductible or co-insurance.
For example, let's say your insurer's contracted rate for a primary care visit is $120. If you have a $20 co-payment for primary care visits, you'll pay $20 when you see a doctor in your network, and your insurer will pick up the remaining $100.
If you go outside of your network, you pay more because those providers have not agreed to a set rate with your insurer.
"For somebody who's been going to a particular doctor and may now have new coverage, they really need to be certain that the doctor they have a long-standing relationship with is part of their network," said Mark Rukavina, principal at Community Health Advisors LLC in Chestnut Hill, Mass.
"If their doctor, who is part of the network, refers them out to a specialist or to a particular hospital for care, they need to make sure those providers are also in the network because that unpleasant surprise of co-insurance trips up lots of people," Rukavina said.
Ask about costs.
Before undergoing a procedure, ask how much it will cost and how much your insurance company will cover. Much of that will depend on whether you've met your deductible and annual out-of-pocket maximum.
Your insurance company can help you with this.
Questions you should ask are:
• What do you know about my diagnosis?
• Should I get a second opinion?
• How much is this going to cost? Who's going to be involved?
"When trying to judge medical expenses, the biggie is trying to figure out who all will send you a separate bill," Sylvest said. "That is by far one of the most challenging things to discover. Call the insurance company and ask, 'How many people could I possibly get a bill from?' "
Know the rules.
Your insurance company may require preauthorization for a procedure. For example, some plans require participants to call the insurance company before nonemergency outpatient MRI and CT imaging procedures to receive full benefits.
Ask about financial aid.
The Affordable Care Act requires nonprofit hospitals to have written financial assistance policies.
"This only pertains to nonprofit hospitals," Rukavina said. "But many for-profit hospitals do have financial assistance policies as well, so people should ask whether the hospital has any form of financial assistance they offer to patients."
Many nonprofit hospitals have their financial assistance policies structured in a way that they provide help to both insured and uninsured patients, he said.
"Even if somebody is insured, they might have a lot of first-dollar costs in front of them like for a deductible, significant co-pays or co-insurance," Rukavina said. "They should ask and see whether or not there's a financial assistance policy and whether it covers people with insurance, as well as the uninsured."
"Many providers also offer prompt-pay discounts to people, so if you pay at or near the time of service, or within 30 days, they'll oftentimes offer a prompt-pay discount," Rukavina said.
Get itemized bills.
"The first and foremost thing any patient has got to do is get a detailed itemized statement," said Pat Palmer, chief executive of Medical Billing Advocates of America.
"What hospitals provide them is something like a summary deal. It will say, 'OR: $20,000,' 'Miscellaneous supplies: $30,000.' You have no clue what you're being asked to pay for."
Once consumers get the itemized statement, they should analyze each charge, she said.
Be your own advocate.
It's important to speak up and fight for your rights.
"I've found that providers are willing to work with patients if they hear from them," Rukavina said.