Surgery Expenses - What's Your Share and How Will You Pay?

Facing surgery is a stressful situation not just because it's surgery but also because of the cost. Regardless of what kind of health insurance you have, chances are good that you’re going to have pay part of the bill whether it’s in the form of co-payments, deductibles or out-of-pocket expenses.

Additionally, there are some surgeries, like plastic surgery or weight-loss procedures, that may not be covered by insurance. As unattractive as paying it yourself may be, it might be your only option if you really want or need the surgery. If you have surgery, do you know what your share will be or how you’ll pay for it? Below are some helpful tips and ideas.

Learn the Real Costs

If you’ve ever looked at a hospital bill, you were probably surprised at not only the total bill but the many unexpected incidentals for which you were charged. You’re paying not just for the actual surgery but also pre-surgery exams, surgical unit fees, anesthesia, x-rays, lab costs and exams, among others. Prior to getting or scheduling the surgery, research all the possible costs involved during and after the surgery.

• Deductible – You pay this amount each year after the insurance has paid their portion
• Co-payment – This is the amount you’re required with each occurrence.
• Out-of-pocket expenses – This is the final balance of what is considered your share of the bill.
• After surgery expenses – These may include rehab, prescription drugs and lost income while recuperating.

Don’t Be Afraid to Negotiate and Shop Around

The costs for your surgery may vary from hospital to hospital. Contact as many facilities as possible to determine which one offers the best rate. Insurance companies typically have a maximum rate of what they consider is the “average cost” for that procedure, and that is the max they will pay.

Hospitals generally try to stay within what they know they can charge and still get paid. Individuals are usually charged a higher rate than an insurance company would pay. The medical facility also has access to programs that can assist you in paying your surgical expenses. Some people are choosing to have their surgeries performed internationally because of the lower costs.

It’s a good idea to contact the hospital, particularly if you are self-paying, prior to the surgery to negotiate on the price. If not, do so as soon as possible after the surgery. Once the bills start to roll in, the window for negotiating may be over.

Possible Payment Options

Once you’ve determined approximately how much you’ll be expected to pay, you can determine the best payment option. The best payment option shouldn’t just be the one that pays the bill the quickest but should also be the one that works the best for you and your family short- and long-term. Below are some payment options worth considering.

• Retirement Funds - We seldom want to touch our retirement funds early. However, it can be an option, particularly if you’re young enough to still rebuild the fund. Many individuals draw money out of their 401k or 403b plans or take out loans against the plans. The same can be said for Roth IRAs and pension plans.

• Savings Accounts – We always hate to use up or “rainy day” savings or emergency fund, but a surgery definitely fits into the category of rainy day. The downside of this option is that the savings is gone.

• Loan – Although you will have to pay interest on a loan, it’s a convenient way to get the bill paid quickly.

• Home Equity Loan – If you own your own home and have value in the home, you may be able to take out a home equity home to pay the surgery expenses. You’ll be making a monthly payment, but mortgage loans charge lower interest rates than loans, and they’re paid over a longer period. The interest you pay on home equity loans is also tax deductible.

• Credit cards – This is always an option if your credit card carries a high credit limit, but the interest rates on credit cards do not make this an attractive option.

• Payment plans – Some medical facilities will allow you to make monthly payments after the surgery. Others may offer payment plans that must be made prior to the surgery.

• Changing insurance companies – Provided this is not an emergency surgical procedure, it may be worth your while to shop around for different insurance companies and see what each one will pay towards the bill.

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