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Coping with surprise medical bills

by ERIN LOWRY BLOOMBERG OPINION (TNS) | May 8, 2022 at 1:48 a.m.

Millions of Americans receive surprise medical bills each year. That includes insured individuals, according to research by the Peterson-KFF Health System Tracker. A new federal law, The No Surprises Act, went into effect Jan. 1, banning most unexpected medical charges.

There's still a lack of understanding about how insurance systems work. We're never really taught the basics of how to better advocate for ourselves.

Being insured is the first step in protecting your balance sheet from a health crisis. In many cases in the U.S., health insurance is tied to employment. Other options include Medicaid (for those who qualify based on low income), COBRA for a limited time if you lose your job and are searching for a new one, or Medicare for retirees. The self-employed can go through the Affordable Care Act health-care marketplace or private companies to secure a plan.

Traditional health insurance usually offers lower deductibles (how much you pay for a medical service before insurance covers the rest) and higher premiums (monthly payments). A high-deductible plan (HDHP) has lower monthly payments, but can have bigger financial ramifications in the event of a health crisis since you'll pay more out-of-pocket before insurance kicks in. It is better to have an HDHP than be completely uninsured.

You need to know what is covered by your plan, including which doctors and hospitals are in-network. Your insurance company may not cover a visit to an out-of-network doctor, meaning you could get a large bill later.

The best way to confirm what is covered is to ask your insurance provider. You can also ask the doctor about how a medical procedure, such as a blood draw, will be coded for billing purposes.

You want to make sure everyone with whom you interact at a doctor's office or hospital is in-network. If even one doctor in the room, like an anesthesiologist, is out of network, you could end up with an unexpectedly high bill.

Don't understand a term on your bill? Ask your insurance provider. Call the hospital or doctor's office if you haven't received an itemized bill for a visit. Once you have one, walk through each item and confirm that it's a service you received.

If things don't add up, you can file a formal appeal with your insurance provider. Information about how to appeal should be on the Explanation of Benefits (EOB) you receive from the insurance company. You should also call the hospital billing department to share that you're disputing your insurer's decision so your bill isn't sent to debt collections.

Call the financial assistance department of the hospital to ask about income-based programs or a payment plan. Or you could ask for a discount if you paid the full bill upfront instead of through a payment plan.

It's wise to include your deductible, or even your out-of-pocket maximum, as part of your emergency savings fund, especially if you have a high-deductible health plan.

Flexible Spending Accounts are another tax-advantaged way to save up for future medical expenses by putting pre-tax dollars into your account. These come with a use-it-or-lose-it policy each year.

Unfortunately, in the U.S., it's entirely on us as individuals to safeguard our physical and financial health. Taking the time to understand your particular insurance plan--or to get insured in the first place--is the best way to start.

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