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The medical costs of cancer, as we saw in the cases of Stacy Brooks and Molly MacDonald, can devastate a family. Ruined credit scores, outstanding bills, and foreclosed homes are only a few of the problems patients and their families can deal with when faced with the costs of surgery, treatment, medications, and other necessities.
Kevin Gallegos, Vice President of Phoenix Operations for Freedom Financial Network, LLC, is a national credit and debt expert. Here are his 13 steps/tips to help avoid financial turmoil in the wake of a serious illness or cancer diagnosis.Note that for each of the following, it may be the patient, the patient’s spouse/partner/significant other/family member/friend/advocate who takes responsibility. Also, different steps will apply to people depending on the individual illness, stage and situation.
- Assess finances. Determine exactly where you stand. Subtract your regular monthly expenses (including mortgage or rent, utilities, groceries and transportation costs) from your monthly income (wages, child support and other sources of revenue). Use this info to create a monthly budget and figure out what expenses could be cut. These might range from daily lattes to cable TV and dining out. Next, decide which assets -- retirement accounts; savings accounts; valuables such as jewelry, boats, or cars; or real estate -- you could draw from or sell off, if needed.
- Get organized. Keep a file folder with information about doctor visits (including who you saw, address and phone, and the outcome of the visit); services (including dates and results of lab work, X-rays and scans); and treatments. This data will come in handy when bills start to roll in. Keep a file folder with information about doctor visits, services, and treatments. This data will come in handy when bills start to roll in.
- Go high-tech. Consider using a free online personal health record (PHR) program like Microsoft’s HealthVault. These Web-based tools allow you to easily collect and track health information via your smartphone, computer or tablet. You can link and combine medical records from hospitals, doctor offices, labs and pharmacies to your own personal notes, observations, questions and wellness goals. Certain health plans like Cigna, Kaiser and Blue Cross offer these free to members. The benefit is that you will have an instant snapshot of fees charged by providers, as well as what’s being covered by your insurance.
- Look closely at bills. Whenever you receive a bill from a health provider, or an explanation of benefits (called an “EOB”) from your health insurer, open it immediately and review it carefully. Check to make sure you are not being billed twice for a service, paying a charge that insurance should cover by insurance, or finding a charge for services you didn’t receive. Call the provider’s billing department or your insurance company promptly if you do not understand the charges or think there’s a mistake.
- Know your health rights. If your health insurer denies coverage for medical treatment, prescription medications or other services, you can appeal the decision. Talk to your doctor’s office. Sometimes they can work with the insurance company to resubmit the request with a letter explaining the need for the particular service or treatment. Alternatively, they might be able to use a different, more accurate billing code.
- Be upfront about your situation. If medical problems have affected your ability to work (and therefore your income), let the billing offices know about your difficulties. As soon as bills arrive, contact doctors’ offices, hospital administrators or their billing departments. Explain your predicament and discuss options they can offer you.
- Negotiate payments. It may be possible to defer payments for a few months or to negotiate an interest-free payment plan that allows you to contribute a small amount toward each bill every month. If you don’t have insurance, ask for a cash-payer price. Some providers will agree to charge the discounted fee that Medicare or Medicaid pays.
- Pay bills smartly. Don’t take out another mortgage on your house to pay medical bills. If you fall behind in payments, you could end up in foreclosure. You also want to avoid using credit cards, as interest rates could result in you racking up even more debt and interest.
- Ask for guidance. Hospitals and insurance companies typically have case workers on staff who can work with you to help make sense of paperwork. These professionals can help interpret bills, estimate costs and resolve payment issues.
- Consider financial assistance. Charitable foundations, churches, community groups and government agencies can provide short- or long-term financial relief. Some hospitals are required by state law to provide free or reduced services (called charity care) to low-income patients. However, few medical providers volunteer this information outright. Ask if you’re eligible.
- Look into credit advocacy (also known as debt settlement or debt resolution). If you are at the point where you have very serious debt – medical, credit card or both – and are struggling to make required minimum payments, debt settlement may be a viable option. These businesses, now working under FTC guidelines, work on a consumer’s behalf to lower the principal balances they owe. Customers might be able to pay less than their total balance – but it can be a long process and can hurt credit scores.
- Consider credit counseling. Credit counseling agencies set consumers up with a debt management plan that reduces the monthly payment. They can do this because they have pre-arranged agreements with credit card companies to lower interest rates on existing debt to a creditor-issued "concession rate." People will still pay the full amount of debt, and their credit score will be hurt.
- Look at bankruptcy as a last resort. It can be expensive and painful, and it destroys a credit rating for many years. If you are considering bankruptcy, speak to a bankruptcy attorney licensed in your state.