Post # 1
After DH’s hospital stay a few months ago, we got hit with a pretty hefty bill. We have insurance but apparently it didn’t cover the whole thing so now we’re stuck paying out of pocket. The bill isn’t that large but its still big enough to be annoying. We could pay off the whole thing right now but we’d rather keep that money in the bank instead of giving it to the hospital, so this morning I set up a payment arrangement. We’ll be paying a couple hundred dollars p/month over the next 7 months to wipe out our balance. Since this is interest free, we felt that it was the best course of action but I still don’t love the fact that we’ll owe on this for a while.
Everyone that I’ve spoken with who have incurred medical bills have all said that they make payments on their balance (some as low as like $10 p/month) so I don’t feel that bad but I’m still curious what the norm is given my “everyone” is like 10 people.
For those with medical bills, did you pay them off upfront (assuming the bill is more than $1k) or chip away at the balance over time?
Post # 3
I would ask my accountant if there is any tax benefit to structuring the payments so they span across two years. Generally, you do need to have out-of-pocket expenses that total over a certain percentage of your income before there is any tax break given, but I am not sure if the date the debt is incurred is what factors in on your taxes, or if it’s the date that the debt was paid.
If you can get a tax break by making payments in both 2012 and 2013 then that’s the best approach; that money will be spent one way or the other but if you can get a hundred bucks back from the feds, then do it.
If there’s no tax benefit, and no interest-bearing debt to pay down first, then I’d just pay it all off now. The current interest rates on checking or savings accounts are so low that you are not going to earn interest in a large enough sum to make it worth managing payments for 12 months or however long (and even if you’re doing electronic automatic payments, that is still one more thing to manage while you’re balancing your checkbook).
Post # 4
I am a lucky biotch and have an expensive disease (think $40k/year just to keep me kind of healthy) that I’ll never be able to afford so my parents pay my $2,500 deductible every year and then after that, there is no copay for anything. If my parents weren’t so guilty (it’s a genetic disease so they feel responsible, poor guys) gracious though, I would choose the payment plan option. I don’t even have $2,500 in the bank and I meet the deductible every year by February.
Post # 5
@UpstateCait: I had a car accident a couple of years ago and insurance didn’t cover all of it. However, I paid the entire balance right up front because the hospital offered me a discount (I think 10%, can’t remember) if I did. It was worth it, plus it was one less bill hanging over my head.
Maybe your hospital would do the same, offer a discount for payment upfront, it’s worth a call. ?
Post # 6
When I didn’t have insurance and had just graduated college without a full time job, I set up payment plans and paid off a $2k bill in 2 years. I find that a lot of hopsitals will work with you and will accept any form of payment as long as you are honest and actually work towards it.
I also got tax benefits from it, so that was a bonus I didn’t expect.
Post # 7
I just went through this! I got a 2k medical bill from an ER visit. I could pay it off up front but chose to set up a payment plan – they give you 18 months to pay it off. I ended up paying like $50/month. I have like $200 left and FI is always like just pay it off already but I’m like why?! It’s interest free, might as well keep on the plan and have extra $ to go towards other bills!
Post # 8
I would pay it off upfront, just because I don’t like having extra debt hanging over my head. But interest free plans aren’t bad!
Post # 9
If we have the money we would pay up front. That is what we did after munckin was born for my portion of the bill and munckin’s part. Thank goodness though for my insurance. Since munchkin had to stay in the NCIU the bill before insurance was just as much as buying a house!
Post # 10
I know my medical bills would be sent to collection in 90 days if I had an overdue balance. If you can make payment over 7 months with no penalties or interest then I think that would be the best course of action.
Post # 11
@MrsWBS: Exactly! Interest-free means take your sweet time with it. I bought a couch a while back that cost $900 and I took a year to pay it off. I knew full well it was ridiculous, but that didn’t stop me!
Post # 12
I’ve pretty much always made payment plans. I have Kaiser and they require at least 10% of the bill be paid each month. And they do offer a slight discount if you pay in full but it’s only if the amount is over $1k.
Post # 13
Lucky for us, each of us have a Sterling card to pay any out of pockets costs. Quick info: A Sterling card is a pre-paid debit card with limited use. It renews every year (when LO is expected to be born), so we have been using the card to pay the medical bills off each month. If the bill from LO is extremely large and by some chance both our cards do not have enough funds, then we would have to pay it off in chunks.
It would be extremely annoying to have to pay them with our own money though. So, I feel you.
Post # 14
@Sunfire: I didn’t even think about trying to negotiate a discount. It would probably be worth it to pay it off upfront if I can get something out of it.
So, I spoke to my co-worker about this after I made the call and I told her that we set up a payment arrangement. She said that it’s best to not pay it off upfront so that the hospital doesn’t expect that in the future. She’s kind of crazypants so I’m curious if this makes sense to anyone else?
Post # 15
i personally don’t like to have any sort of debt so if it is at all possible, i would pay it off in full.
it’s a good idea to check with the hospital to see if they will give you a discount for paying in full.
Post # 16
I voted before you said zero interest. I’ve never had a bill so big that I didn’t pay it off all at once… but if it was zero interest. I would set up a payment plan so that I had money in the bank, just in case.