Unexpected medical expenses can eat through your savings, max out your credit lines, destroy your household budget, and threaten to put you into bankruptcy. A short time in, you may find yourself asking for extensions on your extensions and begging your bank not to repossess your car or foreclose on your home.
If you did everything right, you have health insurance and short term disability insurance at least. Even if you do, you’re looking at only a percentage of your paycheck and you still have to scrape together enough to cover your max out of pocket for the year. What if your medical emergency spans two calendar years? Now you’re on the hook for double. Not everything is going to be covered by insurance either. You may want care that is not considered medically necessary as a precaution or for your loved one’s comfort.
This was the case when my daughter had a medical emergency with a diagnosis that requires ongoing care. She’s 23 years old and has her own income and her own health insurance but she suddenly found herself unable to work or pay her bills. Short term disability processes their paperwork ever so slowly and since her diagnosis came in December, our family had to cover the previous year’s max out of pocket as well as the present year’s. Add that to the fact that she was transferred from one local hospital ICU unit to another and then yet to a third out of state, we now have non-covered medical expenses. The biggest of which so far is the 12 hour ambulance ride. Was it medically necessary? Yes. But whose choice was the facility 12 hours away? Ours.
Here’s what I’ve learned about staying ahead of the big unexpected medical expenses from my family’s experience as well as from others we’ve met along the way.
1. Make sure the hospital has your insurance information on file.
You will avoid some stress later associated with phone calls and argument over unpaid bills because the hospital may not have had appropriate authorization for your care from your insurance company. They may need to notify your insurance immediately of your inpatient stay and expected treatment. Avoid issues by making sure they have your insurance information on file as soon as possible.
2. The moment you know you’re looking at hospitalization or care beyond that day that involves more than a simple follow up visit with your PCP, call your insurance company.
Your insurance company can help you understand your benefits. They can tell you what to expect for your out of pocket expenses. What is your deductible? Your responsibility after the deductible is met? What is your out of pocket maximum amount (this is the amount at which your insurance company begins paying everything at 100% and you will no longer have to pay for any portion of covered medical expenses for the plan year).
Your insurance company may even want to assign you a case manager. This is someone that will check in with you from time to time to make sure you’re receiving the care you need. If there is any issue with insurance, she will help you. If you require homecare after leaving the hospital, she will speak with the discharge planners at the hospital to help coordinate covered care for you. It is usually your choice whether you want to communicate with a case manager but there are some cases where it will be required for coverage. If you are assigned a case manager, you can ask.
3. Add up all the medical expenses you can expect to incur from this moment forward. Include expected follow up and ongoing treatment.
You will want to add up (using your best guess at this point), your max out of pocket, any expected non-covered expenses and expected travel expenses if ongoing treatment will be needed outside your area or state. Don’t forget to add in additional expenses that may be incurred feeding and caring for your family if you will not be there to cook, clean, shop, do laundry, help with kids homework, pet care, etc… Aside from the stress of the situation, your family may be incurring additional expense by eating out a lot, you may need to call in a cleaning service, a tutor, and maybe even board your pets for an extended period. This all costs extra money. Can your household budget swing it all?
4. Don’t panic. Follow these tips to get the money ready to go where it needs to without putting off necessary care or medication following a hospital stay.
First, if someone from Registration or Finance comes to your room and asks you to pay your deductible or a down payment on your deductible now, tell them you can’t do that today. Even if you have some money you can give them, put it off. You are dealing with an unexpected medical issue and your family is likely in crisis. After going through the list above, you will need your cash on hand to deal with immediate expenses. Then you really need to determine what care you will need after your hospital stay. If you are going to be seeing a specialist for follow up or additional treatment, you will be expected to pay your patient financial responsibility at the time of those visits. Your insurance company will likely not process the payment for the hospital stay prior to your follow up visits which means you will still need to pay for those visits until your deductible shows it has been met. So try not to part with any money right now if it’s not absolutely necessary. One exception may be if the hospital is offering you a discount for paying right away. They may give you a small percentage off your final bill if you pay your deductible before leaving the hospital. You should weigh this savings against what you are expecting to deal with financially in the next several weeks or months afterward.
5. If you are wondering right about now how you will survive financially, it’s time to start fundraising.
If you need help with travel expenses or just don’t want to stray too far away from the hospital, talk to the social services department at the hospital. They will likely have access to free or discounted hotel stays, free or discounted flights, and even the names of organizations that you can contact for help with medical expenses and even living expenses.
Drop every non-essential bill you possibly can. If you have cable, shut it off. Keep some cheap internet if someone works or does homework at home. If you have a storage unit, have someone empty it and clutter up your garage for right now. Whatever you don’t need to survive, let it go for right now.
This is a perfect opportunity to clean out a garage or attic or even declutter your entire home. That’s right. It’s garage sale time. You can also try online garage sale sites like ebay or facebook sale pages. Look up your city’s name on facebook plus the words “swap shop” or “garage sale” and you will be able to post items for sale locally that people will come pick up or you can meet to exchange cash for items. Offer Up is a smart phone app that seems to be growing in popularity as well. It will list items for sale within the local parameters a user sets up. You may be able to sell items that way as well.
Fundraising beyond that may also be necessary. Go Fund Me or YouCaring allows you to tell your story and request help from family, friends, and the general public both in your home country and all over the world.
Do you bake? Consider putting together a bake sale or a list of items that people can pre-order. There are also companies you can find online that specialize in fundraising. They will let you keep a percentage of the proceeds for selling items like candy, pizza kits, candles, gifts, or other merchandise.
Check with your local churches and organizations. They may be willing to hold an auction for you or they may offer to pay a couple of bills for you. A golf tournament, bowling tournament, or poker tournament may be another way to raise money.
It’s time to get creative. Ideally, you want to keep what you have on hand, paying only essential household bills until the immediate crisis is over. Then, you need to prioritize the medical expenses, making sure you have enough to pay for ongoing care. The hospital stay or providers you won’t be seeing again can be put on a payment plan to pay off gradually while you make sure that current providers are being paid on an ongoing basis. Save ALL of your bills and insurance statements. I suggest putting together a binder to keep track of everything. Make sure all your bills have been billed to your insurance first and make sure the bills coming in that you are expected to pay do not exceed your maximum out of pocket amounts.
A family medical crisis doesn’t have to become a financial crisis too. It may feel that way at first but tightening your belt and prioritizing all bills will help you get a handle on your unexpected medical expenses before they get out of hand. For more ways to make extra money, you may want to read my post, 44 Ways Anyone Can Make Money at Home. It has over 200 links to resources.
Make Your Money Work for You!
Take the challenge and learn the best strategies for budgeting each paycheck! Never lose track of your money or expenses again!
You'll also receive a FREE printable for every day of the challenge. Sign up Now!