How to Escape the Medical Debt Trap
Published by Claire Moylan at Smashwords
Copyright 2011 Claire Moylan
Smashwords Edition, License Notes
This ebook is licensed for your personal enjoyment only. This ebook may not be re-sold or given away to other people. If you would like to share this book with another person, please purchase an additional copy for each recipient. If you’re reading this book and did not purchase it, or it was not purchased for your use only, then please return to Smashwords.com and purchase your own copy. Thank you for respecting the hard work of this author.
Disclaimer
The use of this ebook is intended as an introduction and development of ideas to pursue further when trying to eliminate medical debt. It should not be treated as a definitive guide, nor should it be considered to cover every area of concern, or be regarded as legal, financial, or medical advice. Readers should always consult with appropriate legal, financial and medical professionals on matters relating to their legal, financial or medical health and not take action or inaction based solely on the contents of this ebook.
The publisher and author of this ebook and any materials accompanying the book have used their best endeavors in the preparation of this ebook. The publisher and author make no representation or guarantees with respect to the book's accuracy, fitness, suitability or completeness of the contents of this ebook. The contents and information of this ebook is strictly for educational purposes only, and, so if you the reader wish to apply ideas contained within this ebook you are deemed to be taking full responsibility for your actions. Readers who fail to consult with appropriate experts or authorities assume the risk of incurring financial, medical, or legal problems.
The publisher and author of this ebook shall not be held liable in any circumstances directly or indirectly for any consequential, punitive, special, incidental or any other damages arising directly or indirectly from the use of any of the material contained within this ebook, neither does the publisher or author warrant the content, suitability, effectiveness or performance of any sites listed or linked to this ebook. Such sites and/or links are for information and/or educational purposes only and their accuracy and/or content are not warranted for any explicit or implied purposes.
Chapter 1: Catching My Foot in the Trap
At the beginning of 2011, I was working as an uninsured freelance writer when I woke up one night to go to the bathroom. In the dark, I slipped on a stuffed toy my daughter left on the floor, and ended up with a wrist broken in two places and tons of medical debt. I was just barely digging out of piles of debt leftover from the panic of 2008 and there was no extra money from my daily budget to spend on medical bills. Of course, my livelihood also depended on my using my wrists, so that made it a medical crisis I could not ignore. After visiting urgent care, I was swept into the emergency room as the only possible solution due to the nature of the fracture.
At the time, by divine providence, I happened to be dating the chief financial officer of a local hospital unrelated to my care, and he was the person that opened my eyes on how to navigate the medical debt nightmare. When the bill came in for a trip to the emergency room it was a whopper! He asked me what I was going to do and being brought up to “pay my bills” and not argue, I said I thought I might raid my 401K to pay the bill. The bills that came in were over $2,000 for emergency room services and another $1500 for outpatient services. If I paid it early and took the money from the 401K, I reasoned, it would trigger a $300 early payment bonus from the hospital. I would be even closer to bankruptcy, but at least the debt would be gone. He took one look at me and said: “Oh, you’re the type of patient we hospitals love.” When I told him I didn’t have any other choice except to declare bankruptcy now, he told me that I was wrong. Then, he enlightened me on certain facts I never knew about our medical system that changed my mind. He said:
Health insurers only pay 25 to 50 percent of what an uninsured person is charged.
Hospitals have funds set aside for community services to pay for the uninsured.
It is possible to negotiate a medical bill down or eliminate it entirely– you just have to know how.
By 2012 I had almost zero medical debt on my ledger. I will not only tell you how I managed that feat, but I will also tell you how to avoid excessive medical debt in the first place, whether you are insured or not insured. Health costs have skyrocketed over the years, and many people are faced with bills they don't know how to pay. People are paying hundreds of dollars each month and end up with deductibles that do not even cover their services. In fact, 80 percent of medical bills have errors that cost you extra money, but that are difficult to spot for the average consumer. Insurers and hospitals negotiate rock bottom prices, but the general public is not privy to that information and is asked to pay “full retail price” every time. Healthcare is not as expensive as they would have you believe, in some cases. What’s expensive is the built-in greed and inefficiency in the system. Why not pay next to nothing instead, pocket that money, and find better ways to invest in your health? This is information that I believe every person should have to help them decide how to best insure their own health without worrying that one accident will wipe out all their savings in one swipe. I can offer you some fool-proof ways to plan to avoid medical debt for the rest of your life, also.
One thing that has haunted me even after I broke up with my chief financial officer is what he told me about the U.S. medical system. It’s set up to enslave you from the moment you are born to the day you die because almost everyone visits a hospital when they are dying. They will find a way to indebt either you or your loved ones unless you find ways around the system now. Whether you are hundreds of thousands in debt or just a few, my ebook can help you take back control of your healthcare and your wallet.
Chapter 2: What Could Go Wrong?
When you are young, unless you are born with a serious defect, you may end up going to doctors for things like ear infections and childhood diseases. Most people are typically covered by their parents’ plan up until the age of 25 now. This is wonderful and can help to cover children when they most need it for routine medical care. After that, you may end up getting into an accident or catching something, but the odds are good between 25 and 45 that you won’t end up with a major disease. Women will get pregnant and now that is an issue with a system that requires them to pay. When I was pregnant, I had all my expenses paid at one of the finest hospitals in the world and I had both an attending physician and a midwife. That doesn’t happen anymore and you have to realize that one trip to the hospital and you can instantly be in tens of thousands of dollars in debt - even with health insurance! Some people have a family history of illnesses that they know may affect them, and adopting more stringent health care measures is important for these people. For the most part, it is as you age that you end up in the hospital more, but by the time you are 55 you can apply to Medicare.
Believe it or not, insurers know the probability you might get sick or be involved in an accident or even get pregnant. Statistically, they have all that information. By law, hospitals are not allowed to divulge it to the average person, but they know, too. They have been coding things for several years now, and they can probably tell you how many people broke their arms in a certain zip code and the statistical possibility that you’ll get cancer by where you live and where you fit in the population demographic. It’s a frightening thought that your insurer knows more about your state of health than you do yourself, don’t you think? Yet, they are the ones setting the prices for healthcare insurance. Think about that one.
If you were laying bets on a horse race, would you risk your money on the horse you know will probably break a leg during the race? No, you would not bet on them, and odds are you wouldn’t insure them either. However, when it came time to figuring how much of a purse the winning horse should deliver, it would include the riskier horses odds (minus the knowledge the horse might break a leg); otherwise, they wouldn’t win big at all. You might think that no one can predict a broken leg or a broken wrist, but while I was at the doctor’s office he told me a stunning fact. Women of my age and build had the highest incidence of breaking bones due to the loss of calcium as one ages. Do you not think that if a doctor is aware of this that a health insurance company whose sole purpose is to collect medical data does not? All people who pay insurance right now are told the rates are high because of those people who have higher risk, but really those people with potentially catastrophic medical costs are quickly eliminated by the health insurance companies in America because they are profit-driven. Don’t believe me? Get a benign tumor and find out how quickly no one wants to insure you anymore or how quickly your premiums rise. Ironically, if an insurer has no objections to insuring you, odds are you don’t need a super duper health insurance plan, only a catastrophic plan.
In other words, health insurance in America as far as the health care insurance companies are concerned is for the healthy, not the ones that most need it. It is a profit-driven system that holds no compassion for those who are sick or dying. If you haven’t faced that reality, then you probably don’t need this ebook. So, what can go wrong? Everything, and it’s up to you to plan ahead to make sure it doesn’t derail your life for good. As long as health insurance in America remains profit-driven let me be very clear: The American Dream will stay on life support with little hope of revival because it simply makes more financial sense for big business that way.
Chapter 3: #1 Strategy to Avoid Medical Debt
Move. This is the first strategy everyone should consider, no matter what their age. Move to somewhere that provides health insurance for free or cheap – especially if you have something genetic that makes your family predisposed to medical problems. I am not kidding. Even if you have health insurance now through your employer that will fall apart the minute you get laid off. The only sensible way to plan against high health insurance costs right now is to find a country that subsidizes this expense so you won't pay the brunt of it throughout your entire lifetime, which is what the United States currently wants you to do. Without a public option, and only private health insurance companies making the decisions, it will be never be a good deal here in America. If you wait until you get bankrupted here from medical debt, you no longer will be able to emigrate due to the bankruptcy on your record.
Unfortunately, I am not young enough to qualify to immigrate to places like Australia where healthcare is subsidized by the government and the average cost is $40 per month! However, there are retirement places in Mexico where you can get subsidized healthcare. The odds that you will land in the hospital only increase as you age. Find a place now, while you qualify to emigrate, that will take care of you in your old age because America is behind almost every other developed nation when it comes to free or affordable healthcare.
Also, take full advantage of medical tourism. Our hospitals may claim to have “the best doctors, equipment, and know-how” but that is pure hubris. There are plenty of other countries that are less expensive that can provide healthcare and dental work at a fraction of the cost. Even Europe can be a steal paying out-of-pocket for some experimental treatments than relying on your health insurance to pay your bills for you here. At the very least, you will avoid the headaches that come with dealing with health insurers who refuse to pay after they say you are covered. Take a vacation and get your work done elsewhere and say nothing to avoid being dropped for a pre-existing condition. Keep your health insurance in America for emergencies that can’t be outsourced.
Chapter 4: DIY Negotiation Strategies
The majority of us will not only not be able to move or use medical tourism, but over 50 million Americans are now uninsured. Almost 75 million are inadequately insured. That’s 1 in 4 people who do not have the financial resources to play the game the way it has been laid out. So, my advice to you is to stop playing the game by the rules. They don’t work to your benefit anyways. Heath insurance is supposed to keep you from going bankrupt and to allow you to take care of your medical issues. If that isn’t happening after paying for your insurance, then stop paying for it. The truth is that more people went bankrupt as a result of medical debt while they were insured, than when they weren’t. Being insured did not keep them from going bankrupt. Being uninsured may keep you from getting long-term care, however if you end up in an accident an emergency room is required by law to treat you, whether you are insured or not.
If you have the spare cash, and you can opt for a Health Savings Account, it is one of the best ways to prepare for unexpected medical costs without relying on a health insurance company to repay you benefits for high premiums when they hold the purse strings. Instead, opt for a high-deductible catastrophic health insurance policy and supplement it with a Health Savings Account. This way, you get the power of the insurance company negotiating a lower price on your behalf, but you don’t have to wait for them to give you the money to pay your bills – which they are unlikely to do anyways. As an added advantage, the money you contribute to the Health Savings Account will accrue until it is used, unlike high health insurance premiums. If you meet retirement age guidelines and it was not used, the money can be withdrawn in retirement with no penalty.