3 Ways to Pay Medical Costs

The healthcare system seems to getting worse and worse, and even if you are covered, you probably have a high deductible. Most people on the new Affordable Health Care plans still have have to pay thousands of dollars out of pocket before you will get any medical coverage. Unless you have thousands of dollars sitting around, that means you are on the hook for finding a big chunk of change to pay your medical expenses. Here are 3 ways you can pay medical costs that come up.

Ask hospital about options

Many hospitals and doctors offices will work with you on a payment plan. Usually, if you call them and ask to get set up on a payment plan, they can do so, but you need to be careful with this option. The interest rates can be as high as 28% in some cases, which is extremely high. On top of that, sometimes the hospital changes the terms suddenly, and you end up owing even more in interest. If you are going to agree on a payment plan with the hospital, make sure you get it in writing and that you are getting a fixed interest rate that won’t change.

Personal loans

One really helpful way to pay off medical debt is through a personal loan. It essentially acts the same as a hospital payment program might expect that interest rates are typically lower and the rate is fixed over a period of time. Just apply online and borrow exactly what you need to pay off the loan, and then you owe the personal loan lender instead of the hospital.

The other advantage to using a personal loan to pay medical costs is that most hospitals and doctors offices will give a 10-15% discount if you pay the entire amount owed at once. On a $4,000 bill, that means you save $400 to $600 on your total bill, which is a huge discount. Make sure you call the billing department and find out what the total is going to be when you pay medical costs all at once with a discount before you get your personal loan, so you know exactly how much to borrow.

Credit cards

Some people prefer to put pay medical costs through a credit card, so they can take as long as they want to pay it off. If you are able to pay off the card in a couple of months, this is the way to go. You are able to basically borrow the money for free or close to free, and you end up getting rewards points for the bills, which is nice.

The real problem with using credit cards is that the interest rates are higher than personal loans and can change if you miss a payment accidentally. You also can make minimum payments every month, which is barely enough to cover interest on the cards, and may never actually be able to pay off the debt. For people who aren’t able to pay off the card quickly, this is not a good option and can cause more harm than good.

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