Should You Use Your Emergency Fund For Medical Procedures?

July 05, 2017

After sharing our decision to pursue in vitro fertilization and how we’ll pay for it on the blog last week, I was a bit overwhelmed with the outpouring of support from friends, family, colleagues and even complete strangers. THANK YOU for your words of support and prayers, they mean so much to us!

I’ve also been asked by a few people why we aren’t using our emergency fund or Health Savings Accounts (HSAs), and those are great questions! Here’s my answer:

Using your HSA

Anyone who has discussed the benefits of the HSA with me knows that I actually emphasize the S in HSA for savings — rather than use the funds I’m accumulating in my account for everyday medical expenses like co-pays and minor bills, I’ve been paying for those things with my out of pocket spending money. The thought is that we’ll let our HSA money build up for when we have a big medical expense that we wouldn’t be able to pay out of pocket, while realizing the tax savings along the way.

Well, that day just came sooner than we had planned, so we WILL be draining our HSAs, it’s just a bit of a drop in the bucket compared to the total cost of IVF. Between my HSA and my husband’s, we can’t even cover the cost of the medication required, but we will cover what we can with this tax-free money.

Why not use the emergency fund?

As urgent and important and life-changing as this is for us, we do not feel that undergoing fertility treatment is an emergency in the way that the financial emergency fund is intended. We are stretching ourselves financially to do this, but we still need a back-up in case one of us loses our ability to earn income, which is really what the emergency fund is for —

To keep a roof over your head,
Food on the table,
Transportation to work and
Other basic needs met during times of unexpected income disruptions.

It’s why my colleague Erik wrote about the emergency fund taking priority over paying down debt — it’s your first line of defense against “life happening,” even if it’s not earning a ton of interest and you’re paying interest on other debts in order to keep it in place.

At the end of the day, we are choosing to undergo IVF. It’s true that without it we may not ever have biological children, which would change our life plans and be tremendously sad, but that’s not an emergency. It sucks, don’t get me wrong, but no one will be homeless or go hungry if we DON’T do this. We feel a tremendous sense of gratitude and fortune to even be in a position to make this choice – many people are not, which also makes me sad.

Sometimes it can feel like you don’t have a choice, like if you have an accident and receive a $10,000 hospital bill. While it’s important to make a plan to pay your medical debts to avoid them going to collections, depending on your personal situation, using up your emergency fund may not be the best place to turn — what happens if you’re unable to work and pay your rent? That’s what your emergency fund is for. (caveat: sometimes it DOES make sense, but that’s why it’s called “personal” finance)

Keep that in mind the next time you feel tempted to tap your emergency fund — is it a true emergency that will literally keep you housed, fed, clothed and employable? If not, it’s best to seek another way to pay or to make a different choice.

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Don’t Let Medical Bills Ruin Your Financial Health

June 21, 2016

If you have read my posts, you know that my family has been in the emergency room so often that during one visit, the nurse was able to get our information from memory. This experience gave me a taste of what people with ongoing medical expenses go through. We are lucky that most of our visits needed little to no follow-up and we are all healthy though.

Not everyone is so fortunate. A study by Harvard University showed that medical expenses are one of the top reasons for bankruptcies. If your medical expenses are crippling your finances, consider doing the following:

Shop around for prescription medication. The same drug can cost wildy different prices depending on where you go to get the medication. This is because the price of the drug typically depends on the pharmacy’s deal with the supplier, the pharmacist’s overhead and profit margins. FDA regulates the drug, not the price. Shop around for the best price or use websites like GoodRx.com or LowestMed.com to shop around for the best price in your area.

Bonus Tip: Typically, you do not need to be a member of warehouses like Costco or Sam’s Club to use their pharmacies.

Before you get a medical procedure, find out the average cost. Even though your doctor may be covered by your insurance, the facility where you are getting your procedure may not be, so be sure to verify insurance coverage. The price of a procedure can cost three times or more as much at one facility vs. another. Call local hospitals or use websites like Healthcare Bluebook to gauge how much your medical bill may cost. Finally, try to negotiate the cost of your procedure before you get the service.

Bonus Tip: Even after you have your procedure, still do a cost comparison. If your bill is much higher than the average for your area, use that information to negotiate your medical bill.

Contact your hospital if you cannot afford to pay. Many hospitals have programs for people who are uninsured or under-insured. Contact your medical provider before the procedure if you feel like you might not be able to cover the bills. The billing office may be able to find alternate ways to pay for the bill.

In addition, ask the hospital for a written financial assistance policy. The policy should spell out eligibility and the process of applying for assistance. Make sure any deals and/or discounts you get are in writing as well.

Bonus Tip: Medical bills are notorious for errors. After your procedure, ask for an itemized bill and your medical records. Any items on your bill that do not match your medical records should be disputed.

If you do not have the time, patience or ability to negotiate on your own, consider hiring a medical bill negotiator. Years ago, I was involved in a car accident and quickly mounted several thousand dollars in medical bills. After going back and forth with the insurance company and lawyers, I hired a medical bill negotiator to review my bills and they found errors that saved me thousands of dollars. The cost of the services varies. A company may charge by the hour. Others charge as a percentage of service. You can search for a medical bill negotiator on websites like the National Association of Healthcare Advocacy Consultants, the Alliance of Claims Assistance Professionals, and the Patient Advocate Foundation.

Bonus Tip: See how much you can negotiate on your own before hiring a professional.

Remember that you have a lot more negotiating power than you think when it comes to your medical expenses. If possible, consider using the resources mentioned in this blog post to shop around for the best price for your medical needs and to proactively check your bill for these. This can go a long way to slashing your medical costs.

Why Everyone Needs to Check Their Credit Report

April 05, 2016

I try to practice what I preach but I do not always succeed. I was recently talking to a group of people about the importance of checking their credit reports at least once a year to make sure that it is accurate. After I was done talking to them, I started thinking about the last time I reviewed my credit report.

When I could not come up with a date, I realized that I needed to start checking the credit report for me and my husband. I went to Annual Credit Report.com website to get our credit reports from Transunion, Equifax and Experian for free. I thought it would be a short review and then I could pat myself on the back for doing what I encourage everyone to do. Unfortunately, that was not the case.

If you have read any of my blog posts, you probably think my family is on a first name basis with the emergency room. Between my husband’s health issues and my recent car accident, I can probably get to the emergency room blindfolded. An ambulance bill we were unaware of popped up on my husband’s credit report from over a year ago.

I called and it turned out it was an old unpaid bill that we never received. It was sent to the wrong address and it was never sent to our healthcare provider. We contacted my husband’s health insurance company, sent them the emails verifying we were unaware of the bill and surprisingly, they paid the bill.

After a few months, we noticed that the delinquency was still on his record. We first contacted the creditor to ask for the information to be removed. After all, they got the address wrong and the bill was paid by the healthcare provider. They basically told us that there was nothing they could do.

We then disputed the bill online, providing supporting documentation (it took about 5 minutes) with all three credit reporting agencies. Credit reporting agencies must investigate disputed items, typically within 30 days. After about 30 days, I received an email stating that the information will be removed from our report. After another 30 days, the information dropped from our credit report.

Do not assume just because you pay your bills on time that your credit report is fine. Once a year, use a checklist like the one on the Nolo website as a guide to reviewing your credit report. Review each section of your credit report for the following:

Personal information section: Make sure your name, address, social security number, birth date and phone numbers are correct, especially if you have a name shared by other people (John Smith, etc).

Public records section: Check for incorrect information or information that should no longer be reported such as bankruptcies over 10 years old, tax liens you paid more than seven years ago, and criminal arrest record more than 7 years old.

Credit account section: Check to make sure that the credit history reported is actually your credit history and not mixed with someone with a similar name. Ensure that all of the accounts listed status is current. For instance, an account that should be closed is still listed as opened. Also check for adverse information over 7 years old.

Inquiry section: Review this section to make sure that the credit inquiries were done with your permission.

If your find inaccurate information, first contact the creditor, if possible, to dispute the item. If that does not work, then dispute the items with each credit reporting agency. The credit reporting agencies are required to investigate. Taking these steps will go a long way to preventing any unpleasant surprises on your credit report, especially during critical times like a house or auto purchase.

A “Financial Meterorite” Doesn’t Necessarily Mean the End of the World

August 10, 2012

My friends have told me for a long time that I just might be one of the nerdiest, geekiest people they know. I’m starting to believe that they might just have a point. I was absolutely fascinated earlier this week (who says fascinated anymore?) when I read a story about a massive meteorite crater that was found in the Canadian Arctic. Somewhere between 130 million and 350 million years ago (when I was a young man according to my children) a meteorite crashed into Earth and left a crater that is 15 miles wide. 15 MILES!!!! That thing came falling out of the sky at a ridiculous rate of speed and created a huge dent in the Earth’s surface. There was also one found earlier this summer that was 62 miles wide and 3 billion years old. The photos of these craters are absolutely amazing. When you think about how something falling out of the sky, completely unexpected, can have significant disruption to the Earth’s surface, it reminds me of some of the stories I’ve heard from people about how they’ve rebounded from severe “financial meteorites”. Continue reading “A “Financial Meterorite” Doesn’t Necessarily Mean the End of the World”