Clear-your-medical-debt-with-a-debt-consolidation-help

Can you pay your medical debts with the help of debt consolidation?

In today’s time each one of us is worried about health-related matters and perhaps this is the reason why people take out a loan for medical treatment of themselves and the loved ones. In the process of doing so, many fall into huge medical debt from which recovery becomes a bit difficult. So don’t you wish to discover how debt consolidation helps in paying off huge medical debt? Worry not because we have the answers to all your queries.

What is medical debt consolidation? How does it help to pay off medical bills?

As you may know, that debt consolidation is a way to pay off your debt. In this method, you can consolidate all your multiple debts into a single monthly payment. This process can really help people when they face with serious or extended medical issues which can result in big multiple bills.

Here you will find ways to achieve debt relief by consolidating and paying off medical bills.

4 Ways to consolidate your medical bills

Medical debt consolidation is easy and there are several ways to approach it.

Here are the options you can look for:

  1. Low APR credit card – One way to cover best medical consolidation debts is to repay hospital debt with a low APR credit card. Several credit card companies offer promotional rates ranging from 0% to 3.99% for a span of 6-21 months. Once that period reaches the expiry date, the card’s APR will go up.
  2. Personal loan – In a personal loan, the user can consolidate medical bills along with high-interest credit card debt and can make one payment to a single lender at a lower interest rate. It is useful to the applicant as it can also be obtained very quickly. The other advantage is that you know what monthly payments you need to make and for how long.
  3. Home equity loan – This kind of loan is secured by the equity you have in the home, which is equal to the difference between your property’s value and what is still owed on the mortgage. In comparison with a personal loan, home equity loans have lump sums with fixed interest rates. The cash can be used to repay your medical debt.
  4. 401(k) loanThere are employer-sponsored retirement plans which allow users to borrow cash to pay debts. It is essential to follow a set of the application process to avoid early withdrawal penalties, and you can borrow a maximum of $50,000 or half of your balance, whichever is lower. Also, you are required to pay whatever you borrow along with the interest within five years.

Effect of consolidation on tax implications

As you consolidate medical bills, you may be charged with tax implications. This can give your the opportunity to reduce your tax bill. If your insurance plan is highly-deductible, then plan on building an HSA (Health Savings Account) by depositing a certain amount into a pre tax account. This can be useful for health care expenses at any point in time. The unused amount is carried forward into the future years. If you have enough income then it is better to put the annual maximum individual or family amount into this HSA fund. This amount will be subtracted from the gross income so that you will not have to pay any taxes.

Sounds good… right?

Other ways to pay off medical debts

Not only you can consolidate debts but there are also other simple ways to pay the medical debts and become financially liberated. Here are a few options:

1. Work on getting the lowest medical bills

Ensure that you do some research before negotiating to lower the medical bills. Negotiating with your healthcare provider to lower bills or extended payment plans can be really helpful in lowering bills. Look for payment support options, such as Medicaid, Children’s Health Insurance Program, and local medical help. You can also buy medicines at a subsidized rate which can reduce the amount generated in the medical bill.

2. Opt for an income-driven hardship plan

If you are stuck in a situation where you have low income and high medical bills, you can be eligible for an income-driven hardship plan.

Under the income-driven hardship plan, the sum total is broken into a more manageable amount so that you can pay the regular amount. In this process, you may also be able to reduce the amount you owe. Communicate with your provider to see if any such plan is offered. Before becoming eligible, you can also try applying for Medicaid that could be a useful aid to lower the medical payment.

3. Negotiate for a payment plan

Many medical providers, which include physicians, dentists, and hospitals, can chalk out an affordable payment plan for your bills. This is one of the easiest and most popular ways to resolve a bill you can’t afford in one payment.

In the payment plan, the total cost is broken into multiple equal payments for a period of over a few months. You can also request for bill receipts and other fees related to the payment package so that it is easy to track the amount.

4. Review your medical bills

Have you thought of examining your medical documents?

If no, then it’s time to carefully review all the documents to ensure that you have a brief knowledge of the bills and that they have been arranged properly. Advocates of America have observed that around 80% of bills contain errors, which can make the task difficult and can also give rise to the problems occurring while creating the total report.

If you are looking for the highest possible insurance reimbursement, then it’s better to choose in-network doctors and hospitals. You can also get the benefit of comparing the prices and also learn a lot while you work with the providers, there are chances that you will get more affordable monthly payments over a longer period of time. If you are willing to pay in full cash, providers may also reduce your total bill expenditure.

5. Get help from a credit counselor

One of the common tools for debt payment is the debt management plan which includes medical, credit card, and other unsecured debt. The debt management plans are usually offered by credit counseling agencies, who negotiate interest rates and fees with creditors on your behalf. They also decide upon a monthly payment, which you need to make to the agency, and then the amount is distributed among those you owe.

The debt management plans are mostly offered by nonprofit credit counseling agencies who are adept at negotiating deals for the benefit of the consumer. They try to lower interest rates and fees and also consolidate the monthly payments which are distributed among those you owe.

Additional Tip: You can also check online and read about various organizations that help pay medical bills to lower the debt burden of the consumers. It is also good if you are combining medical bills so that it is easier to evaluate the total amount in the future.

6. Pay attention to the tax effects

As you consolidate medical bills, you may be charged with tax implications. This can give your the opportunity to reduce your tax bill. If your insurance plan is highly-deductible, then plan on building an HSA (Health Savings Account) by depositing a certain amount into a pre tax account. This can be useful for health care expenses at any point in time. The unused amount is carried forward into the future years. If you have enough income then it is better to put the annual maximum individual or family amount into this HSA fund. This amount will be subtracted from the gross income so that you will not have to pay any taxes.

Sounds good… right?

Conclusion

When you are struggling to deal with medical debt, it’s important to be proactive. The sooner, the better. At least, you have to be alert and figure out what all options are available for getting the financial help. This will simplify your life and your financial life will be set on track. Use the best medical debt consolidation option to increase the chances of paying your medical debts.