Medical Billing Advocacy or Debt Consolidation – Which Should You Chose
When faced with tons of medical debt – you have options. However, choosing the right one can be difficult, especially if you don’t have enough information. Here we’ll look at two strategies for dealing with medical debt and help you determine when to use each one…
MEDICAL BILLING ADVOCATES
The Access Project, a nonprofit healthcare advocacy group, estimates that nearly 80% of all medical bills contain errors. Medical billing advocates will help you find these errors and fix them, saving you a great deal of time and money.
Here’s how it works…Once contacted, advocates will examine the bills in question item by item to determine if any of the charges appear to be higher than they should. After ensuring that your insurance company is covering as much as it can, the medical billing advocates negotiate your big, bad bills down with your healthcare provider, leaving you with savings of as much as 75%.
Think about how much time it would take you to review your bills item by item and to research customary charges for each item. Medical billing advocates do all this for you in a precise and timely manner. Their knowledge, negotiation skills, and professionalism are also helpful for when it comes time to haggle with the healthcare providers.
To top it all off, some advocates will charge on a contingency basis – meaning they will charge you only if they save you money. So, you have nothing to lose – but a lot to gain!
For every good medical bill advocate, there are plenty of bad ones. Those that charge upfront instead of on a contingency basis could wind up taking more money than they save you. They also have less incentive to do a good job, since they’ll get paid regardless
You should run background checks on advocates. The quality of the advocate will largely determine how much you end up saving on your medical bills.
WHEN TO USE
Hire a medical billing advocate if you’re dealing with large bills, as these are more likely to contain errors than bills with fewer, less expensive charges. Though you are probably able to handle the smaller bills, the multi-pagers may take some time to comb through and are best left in the hands of an expert.
Have you ever been so drowned in medical debt that you don’t even know where to begin? There’s the dentist’s bill for the cavity he filled, the hospital’s bill for your emergency appendectomy, the ambulance company’s bill for driving you to the hospital the night of your appendectomy; all of which must get paid before they’re sent to collections.
Consolidation is the process of combining all your debts into a single payment, usually done by taking out a bank loan. The loan is used to pay off all your medical debts, leaving you with the sole obligation of paying back the loan over time.
The allure of consolidation is that it allows you to pay off all your debt right away. This means no strained relations with healthcare providers, no burden of having to make multiple payments to several different parties, and most importantly, no negative consequences for your credit score.
Though consolidating your debt into a single loan payment may give you more peace of mind about your financial situation, there are still plenty of things to worry about. To obtain an unsecured loan, you’ll need a steady income history and exceptionally good credit. In addition, unsecured loans come with high interest rates, meaning you could end up paying back more than what you originally owed prior to debt consolidation
Secured loans are also risky in that they require you to pledge an asset as collateral – usually your home, car, or retirement fund. Not paying back a secured loan would cause you to lose the asset you pledged, which could lead to even bigger problems.
WHEN TO USE
Debt consolidation is the way to go if you owe a lot of medical bills and aren’t able to pay them all off. Consolidation will keep the bills from going to collections and, as long as you make your monthly loan payment, will keep your credit score unharmed.