One of the trickiest financial challenges for any working person is an unexpected medical bill. These pesky obligations arise for all sorts of reasons, but most commonly stem from a dispute between you and your insurance provider about which procedures are covered and which ones are not. Unfortunately, even if you’re in the right, it can cost more in legal fees to fight the charges than to negotiate a repayment plan. What are the most effective ways people deal with unexpected medical bills? Here are four methods that all have an appropriate place in your financial arsenal.
Negotiate
Hospitals and doctors’ offices are accustomed to dealing with medical billing disputes. Often, they just want the problem to go away and recoup a percentage of their charges. This is especially true if they feel you have a decent case and might hire an attorney to dispute the debt. Consider calling the office of the company or facility that billed you and explaining that you want to negotiate a cash payment, preferably over a one-year time span.
Use Life Insurance Proceeds
An often-overlooked strategy, but one that can bring quick resolution to a billing dispute, is acquiring funds through sale of a life insurance policy. Via a simple, streamlined process known as a life settlement, just about anyone can turn an unwanted policy into fast cash and use the money on anything they wish. Not sure how much you can get out of your policy? You can use an online insurance calculator to see what you could expect to get in a matter of minutes. There’s no obligation associated with checking out the amount and using the calculator. Many people who find themselves in a money bind of one type or another sell life insurance policies to settle a debt.
Use Savings and Retirement Accounts
If you have enough money in savings to cover the charge, that is always an option. However, few people do, which is why unexpected medical bills are such a nuisance for the average working adult. In some cases, if you can show a financial hardship, it’s possible to pull funds from an IRA, particularly if it’s Roth IRA plan that you’ve held for more than five years.
Many working folks have pensions, 401k plans, and other employer-sponsored arrangements that allow for low-cost borrowing in an emergency or for any reason whatsoever. The thing to remember when using a retirement account to cover a medical bill is that you need to check with the plan administrator if it’s a job-based plan. If it’s an IRA, ask your tax specialist about the conditions under which you can remove money.
Leverage Home Equity
Homeowners often have several routes available to them that other people do not. For example, if you have enough equity built up in your primary residence, it’s usually possible to get a loan against the balance. In some cases, for large amounts, it might be necessary to apply for an equity loan. For smaller amounts, your lender could have other options that do not involve a full-blown home equity loan. There are also some scenarios where taking a loan is profitable to you.