Paid Off!: Medical Bill

Yay! I'm so excited that this medical bill has been paid off! We owed a local hospital $389.24 from an Emergency Room visit at the beginning of this year. Yep, we have insurance. Good insurance too. But that's how much we still owed for x-rays, tests, doctor fees, etc. Sheesh. It took 7 months of small payments but it's paid. Finally!

If you get a medical bill that you can't pay upfront, call the billing office for the hospital or doctor's office and tell them you can't pay all at once. Ask to work out a payment plan and they will usually be glad to set one up for you. When we got this bill we certainly didn't have a extra few hundred dollars lying around and very little extra per month, so I asked for the smallest amount we could pay monthly which turned out to be $50ish bucks. Yeah, we could probably have paid extra on it but we had other expenses that took priority so we just kept the payment plan on track. The good thing about a payment plan is that they don't usually charge you interest so you aren't going to owe less if you pay it sooner, hence there is less incentive to pay it off quickly. To counter this, the hospital will usually require that an automatic debit come out of your bank account every month so that they ensure that they get their money and that you don't default on your agreement.

The alternative is for you to throw away the bills and overdue notices, the hospital tries to recoup some of its losses and sells the bill to a creditor who starts calling you, and your credit report and score gets dinged, sometimes heavily. You would still owe that money and now you have creditors calling and sending you letters, as well as a lowered credit score. Not good.

It's just easier to work out the payment plan.

So now what?: So what happens to that $50 bucks we were throwing at this bill every month? It becomes part of our debt snowball. I don't operate exactly like Dave Ramsey's plan (I pay attention to interest rates and try to pay over minimum payments wherever possible), but I subscribe to the principle of it. This doesn't become extra money that gets blown on movies and pizza. Nope. It's still debt money and is now applied to another bill that need to be paid. So now we will start making larger monthly payments to pay down other debts faster.

Have you had to work out a payment plan for a medical bill? Have you paid off any bills lately? What do you think of the debt snowball method?