Don't let medical debt sideline your financial goals
What we'll cover
How to prepare financially for healthcare costs
Options to try to lower the cost of your medical bill
What medical loans can help finance
If you find yourself staring at a pile of unpaid medical bills, unsure of how to even begin paying them down, you’re in good company. Medical debt is a pervasive problem, with one survey indicating that half of Americans carry some form of it. The issue is on the rise too. Over the past decade, unpaid medical bills became the largest source of debt owed to collections agencies in the United States.
Beyond acting as a source of stress, medical debt can prevent you from accomplishing your financial goals, like buying a home or paying off other types of debt. While you can’t always predict unexpected healthcare costs, you can take steps to help prevent the cost of a medical emergency (or even routine care) from becoming a financial burden.
Planning ahead for medical costs is a smart way to ensure you’re not caught off guard when an unexpected bill arrives. You can set aside funds for future health expenses with an Ally Bank Online Savings Account . You can customize savings goals with buckets , which act as digital “envelopes” that allow you to focus on saving toward particular medical expenses. You might have a dental bucket to save up for a root canal, for example, or a cosmetic procedure bucket to fund an elective surgery.
Even if you don’t have a particular medical savings goal in mind, an emergency fund is a prudent way to save for unforeseen healthcare costs. You can start small and use our calculator to determine how much you may be able to save each month.
You probably comparison shop when you purchase electronics or furniture, but you might not think of it when it comes to healthcare. But you should — the baseline prices for the same service or procedure can vary widely. Hospitals must now list standard prices for medical procedures online, making it easier for patients to see how different providers stack up against each other in terms of cost.
Navigating health insurance and medical expenses can be overwhelming and confusing. Hiring a medical bill advocate to negotiate on your behalf can reduce the stress of dealing with a difficult situation. These professionals are trained to understand the complexities and nuances involved in medical billing and can spot crucial errors like overbilling, as well as help formulate strategies to reduce the amount you owe.
If you find yourself with unmanageable medical debt, you’re not alone. But an inability to pay shouldn’t stop you from receiving the care you need.
Check with your provider to see if they offer medical loans, like the ones available from Ally Lending . In some cases when upfront payment is not feasible, a medical loan can help you get the care you need with a more reasonable interest rate than a credit card, for example. Medical loans can help you finance a variety of needs, including fertility treatment, orthopedic care, cosmetic procedures and even veterinary care for the four-legged members of your family.
Whatever you do, don’t stick your head in the sand if you find yourself with an outsized medical bill you can’t afford. Failure to pay could put you in collections and eventually harm your credit score. Explore all your options, including talking to your provider about ways you might be able to reduce your bill.
Medical debt is an unfortunate and common problem, but it doesn’t have to derail your financial plans. Be proactive about saving for medical expenses, and if you find yourself with debt, know you have options that could help reduce it.
July 20, 2021 • 6 min read
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