How Medical Bills Contribute to Rising Debt

Millions of Americans have credit card debt. For many who struggle with chronic or unexpected medical problems, credit cards are an unfortunate last resort when bills begin to pile up. Even healthy Americans may accrue credit card debt simply trying to pay for medical premiums or deductibles for routine care. Learn how medical bills can lead to credit card debt.

6 Medical Expenses that Increase Credit Card Debt

Healthcare is supposed to keep you healthy, but the costs associated with having health insurance and actually using it quickly add up. Take a look at the most common types of medical expenses that contribute to high credit card debt.

Medical Premiums

Premiums for health insurance vary greatly. Higher premiums may be associated with choosing a PPO instead of an HMO. Also, purchasing health insurance yourself instead of through an employer-subsidized benefit program may lead to higher costs.

Health Plan Deductibles

Deductibles are the price you pay for medical and pharmacy services before your benefits actually begin. That means you may be responsible for thousands of dollars in medical costs even if you pay your health insurance premiums on time.

Cost Shares for Medical Services

After your deductible is paid, you will still be responsible for copayments and coinsurance for services received. If you were in the hospital or had a complex procedure, your share of the cost may be more than you can pay.

Uncovered Services

Health insurance covers a variety of services, but not everything. If you need a service that is not covered or your provider didn’t follow plan rules, like completing a prior authorization, you may be responsible for the full cost. Common services not covered by health plans include alternative therapies, acupuncture, and fitness programs.

Health Plan Changes

When changing jobs or moving from one plan year to another, you may experience a temporary lack of coverage or suddenly discover that previously covered services are no longer paid for under your new plan. These health plan changes lead to additional, unexpected out of pocket costs.

Prescription Drug Costs

Costs for prescription drugs are overwhelming as some drugs can be in the thousands per month. But without the drug, your health may suffer. Many people choose to pay for their prescriptions by adding to their credit card debt.

If you’re not financially prepared to pay for the above costs, paying with a credit card may seem like the only option.

Financial Hardship: 3 Reasons Medical Credit Card Debt Rises

In addition to the medical bills discussed above, credit card debt can begin to accrue rapidly after a significant medical event or during chronic illness. Consider the following examples:

  • Time away from work. When you’re unable to work due to a medical issue, you may suddenly need to pay for living expenses without having an income.
  • Medical supplies and durable medical equipment. Certain medical supplies and durable medical equipment may be required for your condition, but may not be covered by your plan.
  • Caring for family members. If you’re caring for a child or family member who has an illness, it’s tempting to cover basic expenses with your credit card while you’re unable to bring in extra income.

You Can Overcome Credit Card Debt

Whether you’re just starting to accrue medical debt on your credit cards or feel like you’re drowning in debt, it’s important to know there is a way out.

A solid financial plan, the development of a reasonable budget and credit counseling are all bankruptcy-free solutions that will get you out of debt over time.

The quicker you pay down your medical credit card debt, the less interest and fees you will pay in the long run which means you keep more of your hard-earned money.

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