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prepare for medical emergencyMichelle wants to buy a home but can’t get a loan. The problem? An emergency room bill from six years ago that is listed on her credit reports as severely past due. John is fighting a $406 bill he received after being seen in the ER for what the doctor diagnosed as a case of the flu. And Jerry is struggling to pay over $1,300 in ER copays on his limited Social Security income. These are just a few of the many stories readers have shared with us describing their debt problems following a medical emergency.

While someone with a serious or chronic medical problem might expect to wind up in the emergency room or hospital periodically, no one plans to get the flu, break a bone or get in a car accident.

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More than 54 million people reported having trouble paying medical bills at the start of 2012, according to a survey from the Centers for Disease Control. And medical bills are often cited as a major contributor to bankruptcy.

How can you prepare so that a medical emergency doesn’t wipe you out financially? Here are six strategies:

Research Local Hospitals

When our reader Quentin’s daughter injured her ankle, he and his wife took her to the emergency room. They suspected a broken ankle. After X-rays were taken, they were told their daughter had no broken bones, and she was sent home with an ankle brace. That wasn’t the end of it though:

Two months later we get a bill from the hospital for $1500.00. They stated that my wonderful Blue Cross/Blue Shield (Federal) wouldn’t pay the bill. I call my Insurance Co and find out that the Hospital isn’t (a Preferred Hospital). Then I get an Insurance statement from BCBS stating that they covered the xray bill ($900). Then I get another bill from the Doctor (which my daughter or wife never saw) for $950. Again BCBS stating that this Doctor wasn’t a preferred provider. So I appeal the bill with BCBS and they agree to pay the $1,500 hospital bill, but only $250 of the Doctor bill. So now I’m getting $700 Doctor bills in the mail.

If you have health insurance, make sure you know the locations near your home, work, and/or children’s schools that participate in your health insurance network. Not only will you save money by going to an “in network” provider (which usually means lower out-of-pocket costs), these providers must agree to a fee schedule negotiated by the insurance company. If the amount they charge is higher than that, too bad. They can’t “balance bill” patients for the difference.

A warning, though: the physicians you see at an emergency room may be contractors of the hospital and therefore may not participate in your insurance network. It’s nearly impossible for patients to know this; but you certainly can try to ask – provided you are not in severe pain or unconscious when you make it to the hospital.

Before you travel, do the same thing: find out how your insurance company handles care outside your local area and scout out participating hospitals and urgent care providers.

Don’t have insurance? Request information about local hospitals’ financial assistance policies and review them to figure out which ones may be willing to work with you to reduce the bill.

Put Urgent Care on Speed Dial

A few years ago my daughter was thrown from the horse she was riding and we suspected she had a broken arm. It was too late in the day to take her to her physician’s office so we wound up in the emergency room. Because we had a high deductible for ER visits, her x-rays wound up costing us about $2,500 out of pocket. It was only later that I discovered we could have taken her to an urgent care instead, and our costs would have likely been much lower.

Many of the common medical ailments that bring patients to the emergency room can be handled in an urgent care facility, and the cost savings can be dramatic. For example, according to data published by Wisebread.com, treating an earache will run around $110 at an urgent care center and $400 at an ER. For a sore throat you would pay an average of $94 at urgent care; while at an ER, the average tab comes to $525.

Research which urgent care centers are in your insurance company’s provider network. If you are uninsured, you really need to try to seek care from an urgent care (rather than the ER), if your illness or injury warrants it. Keep those phone numbers and addresses in your phone or posted in your home where you can find them quickly. You never know when you may need one.

Give Insurance a Second Look

If you haven’t been insured because of the cost, or due to a preexisting condition, you may want to shop for health insurance again. Health exchanges required under the Affordable Care Act are starting to open up, and within the year will be mandatory.

Even if you can’t afford great insurance, you may want to consider a high deductible policy. One of the main advantages of being covered by health insurance is the fact that insurers negotiate reduced prices with participating providers. That means that even if you are responsible for a large deductible, the rate that the hospital or physician charges will likely be significantly discounted by the insurer. You may still have to pay a hefty amount out of pocket, but it can be far less than what you would be charged without insurance.

Max Out Your Flex Account

If your employer offers a Flexible Spending Account at work, you may want to contribute to that plan to build up a cushion for medical emergencies, copays etc. In 2013, you can contribute up to $2.500 a year to an FSA.

While contributions will be withheld from your paycheck each payday, you will have access to the full amount you elected to contribute at the beginning of the year. That means if you incur a $2,000 ER copay on Jan. 2, you can use your flex account to pay for it, even though the full amount hasn’t yet been withheld from your paycheck.

Just keep in mind that whatever funds you don’t spend on qualifying health care expenses will be forfeited, so you want to make sure you can spend the money in your account.

Make Friends With Your Pharmacist

Each year, millions of Americans experience health complications due to medication mistakes and interactions and wind up in the emergency room or hospital — if they survive at all. One way to protect yourself from a medical emergency is to make sure your pharmacist is aware of all the medications and supplements you are taking. Don’t be afraid to ask questions about possible interactions — including food interactions — when a new medication is prescribed.

Also take the time periodically to shop around for lower cost prescription drugs so you know where the best deals are to be had. When you find a pharmacy that you believe is a good value, make sure they have complete information about all the medications you take.

Keep a Credit Card Handy

Virtually all medical providers accept credit cards these days. If you have a card you normally pay in full, make sure you know what the interest rate is for purchases just in case you need to charge medical expenses. If you don’t have a low-rate credit card, consider a personal loan to cover the bill or to pay off a high-rate credit card you used to pay for medical bills.

While it’s less than ideal to have to borrow money to pay these expenses, it’s far better than allowing a medical bill to go to collections and ruin your credit for years to come.

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