What to Do When You Can’t Pay Your Health Insurance Deductible

No one is immune to rising medical costs, even if you have health insurance.

The average annual deductible for a single person was $1,573 in 2018, according to a Kaiser Family Foundation (KFF) Employer Health Benefits Survey. If it seems you’re having more trouble covering that deductible, it’s not just your imagination.

A deductible is the amount you must pay for health care services before your insurance kicks in. After you satisfy the deductible, you’re typically responsible for any co-payments.

Deductibles in the United States soared 79% between 2008 and 2018. In comparison, income inched up less than 9% during that same period, according to a Penny Hoarder analysis of KFF and Census Bureau data.

It’s the beginning of a new year, which typically means you start over again with your deductible.  So unless you have a spare $1,600 lying around, you’ll need to find ways to cover medical costs without sliding into debt. 

A bar graph compares individual deductibles to median income over a 10-year period.

We’ve compiled the best strategies when you can’t afford your deductible so you and your finances end up as healthy as possible by year’s end.

What to Do When You Can’t Afford Your Health Insurance Deductible

There’s no quick or easy way to reduce medical debt. But when your deductible is beyond your budget, there are still ways to get the medical care you need without going into debt. Here’s how.

1. Use Savings From an HSA or FSA 

If you have a high deductible health plan (HDHP), you can open a health savings account (HSA) to cover medical expenses. 

An HSA allows you to save the money before taxes are taken out of your paycheck, then put that pre-tax money toward your deductible. 

Any savings you don’t spend in a current year rolls over to the following year, and the money in your HSA stays with you even if you switch insurance plans, change jobs or retire.

If you don’t have an HDHP, your employer may still offer a flexible spending account to cover some medical expenses. Similar to an HSA in that you save pre-tax money from your paycheck, an FSA differs because if you don’t use the money by the end of the year, you lose it. 

But an FSA also covers more expenses than you might think — and well beyond your what’s included in your deductible. Check out this list of what you can buy with an FSA.

2. Shop Around

If you’re not in an emergency situation, it pays to do a little bargain hunting when it comes to medical care — there’s no need to reach your deductible limit unless you absolutely have to. 

I have personal experience with this strategy. When I injured my arm a few months ago, my doctor gave me a list of places to get an X-ray. The closest one was at a hospital I was familiar with, so I figured I would head there. 

Pro Tip

If your total medical expenses exceeded 10% of your adjusted gross income, you may be able to deduct them on your tax return. Check with the IRS for a complete list of deductible expenses.

But just to double check that I was covered, I called my insurer. The customer service representative informed me that, yes, X-rays were covered at the hospital but that I should expect to pay $250 for facility fees. 

He then recommended I go to a private X-ray service provider on the list. It was a 20-minute drive across town, but it only cost me $50. 

Moral of the story: It pays to call ahead and ask questions.

The same goes for every aspect of your care, including medication. Check out how you can use a prescription discount card to compare prices and get the lowest price for your medication.

3. Pay Attention to Your Bill

If you think reviewing your medical bill for mistakes isn’t worth the effort, consider this: As many as 80% of hospital bills have errors

Whether it’s human error or something more nefarious — including illegal practices like upcoding and unbundling of services — medical billing mistakes can add huge costs to your medical bill that you don’t even owe. 

Those extra costs can needlessly leave you paying more toward your deductible.

So before you give up and pay the bill — or worse, ignore it and let it go to collections — here’s how to correct medical billing errors

4. Ask for Help

If the medical bill arrives and you’re too scared to open it, you’re not helping yourself.

In fact, you’re setting yourself up for more financial woes than an oversized deductible — from overdue fees to debt collectors to wage garnishment. 

Pro Tip

Don’t use a credit card to pay for medical expenses — medical bills typically don’t accrue interest, while credit card interest rates average in the double digits.

If you know you can’t afford your bill, the time to take action is earlier rather than later. By getting organized and figuring out how much you can pay, you can approach your provider and potentially negotiate a reduced payment or agree to an installment plan. 

Even if you end up reaching your deductible by the end of the year, by paying in installments you’ll spread out the costs over a year rather than with a huge expense to absorb in one month.

But you won’t get help if you don’t ask for it, so check out this guide to paying medical bills you can’t afford.

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5. Seek Out Wellness Alternatives  

I get it — if your deductible is high enough, you might be tempted to put off medical treatment. But your health is your most valuable asset, and delaying care could end up costing you even more when that nagging pain turns into an emergency room visit.

It can take a little digging, but you can find lower cost options for many services — particularly routine wellness checks and screenings. Here are seven alternative ways to beat health care costs that will help you stay well, so you never have to bother with the dreaded deductible.

Your health is worth it.

Tiffany Wendeln Connors is a staff writer/editor at The Penny Hoarder. Multimedia Content Creator Chris Zuppa contributed to this article.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

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