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Out of Pocket Problems: Harnessing Out of Control Medical and Dental Expenses

dentist-428646_640It’s finally happened. Insurance carriers are charging higher premiums, requiring you to pay higher deductibles, and you’re expected to pay higher coinsurance amounts. How do you handle these climbing costs?

Get Dental Insurance

If you can afford it, you should still have dental insurance. But, you may want to shop around for the best price and coverage, and get details from Guardian Life on the types of plans offered in the marketplace.

Dental insurance is still (usually) cheaper than having to pay for most non-routine procedures out of pocket.

Review Your Bill

Here is where most people get confused. You want to review your entire bill. You may not understand some of the charges, but this doesn’t mean that they are illegitimate. You want to check for things that you don’t understand and write them down. Then, you can question them with your doctor or dentist or the insurer.

If something seems incorrect, contact the doctor or hospital’s business office and ask to have it explained to you. Sometimes, staff won’t have a great explanation for it. Errors are a lot more common than you might expect. If the hospital thinks that there was an error, then your bill will be adjusted. In some cases, you can report the billing error to your insurer, and they might be able to help you.

Whether they do or not depends on the nature of your claim and the error in question. They might be able to give you compensation for it, for example, or they may reduce the amount of your overall claim.

Ask About A Payment Plan

If you’re not sure how to pay for your services, you should ask about a payment plan. Hospitals want to be paid for services. And, they’ll work with you to set up a monthly payment that will satisfy the outstanding bill. Usually, they will also charge you a monthly fee or finance charge, but it will get you into a payment plan that you can afford.

If you cannot afford your bill, try to negotiate it into something you can afford. Believe it or not, doctors, dentists, and hospitals want to get at least some money from you and they’ll negotiate if they have to. As long as you can prove you’re in financial trouble, or you’ve fallen on hard times, they’ll usually work with you.

Get Financial Help

If you can’t pay a single lump sum, and you can’t make monthly payments, you will need to seek out other help so you can pay something. Charitable organizations, like churches and nonprofits, might be able to help you. You might also qualify for assistance based on how much you make.

Making Out Of Pocket Payments

When you visit the doctor or dentist, and you have insurance, you will be asked to make out of pocket payments. Most people believe they understand what this means, but they don’t. And, not knowing can get you into trouble.

So, what does it mean?

Well, an out of pocket payment is an amount of money that you need to pay before an insurer will pay any of the claim for you. This includes the co-payment and deductible. But, it also includes coinsurance amounts. Most people forget this.

And, your out of pocket amount may be a one-time payment or an ongoing amount, depending on the part of your insurance plan we’re talking about. Co-payment are required for each visit, for example. Coinsurance, on the other hand, is a “per claim” out of pocket amount. This means that you only have to pay this fee one time, and only when you receive services that are subject to coinsurance.

Some services will be covered 100% through your insurance, meaning there is no coinsurance amount for those services. Copayments are usually between $10 and $50. Coinsurance amounts are expressed as a percentage of the bill for services.
So, a coinsurance amount of 80/20 covers 80% of covered services, requiring you to pay the remaining 20%. So, if the bill is $1,000, you will be responsible for $200 and the insurer the remaining $800.

For copays, you will need to consult your insurance documentation, but generally the copay is a fixed amount. If you go the doctor, you will usually be charged a fixed fee, like $20 or $15. This will apply for each visit, up to a maximum number of visits per year.

The deductible works like this: a deductible amount is set for the year, and you must pay this deductible before the insurer will pay for any claims under the policy. So, if your deductible is $1,000, and your bill is $5,000. You will need to pay $1,000 before the insurer steps in to pay the remaining $4,000.

Now, if you have a policy with coinsurance of 20%, you will have to pay the $1,000 deductible, plus another $800, which is 20% of the covered bill. The insurer pays the remaining balance.

The next time you receive medical services during the year, however, you do not have to meet your deductible, because it has already been paid.

Usually, coinsurance amounts are capped for the year, too. So, if your coinsurance cap is $5,000, you will not pay for than this amount for all services billed to you during the year.

Erin Talbot works as a financial advisor. She enjoys advising others by sharing her experiences on the web. Look for her posts mainly on finance blog sites.

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