THE BLOG
11/03/2011 12:08 pm ET | Updated Jan 03, 2012

Insider Tips to Avoid Medical Bankruptcy

I received good news last week: My new miracle-maker doctor may keep me on my current cancer medication, which has allowed me to live a relatively healthy and normal life, for a whole year!

This is great news for a person who has fought off Hodgkin's lymphoma for 5.5 years now, but imagine if you received the same news today. Imagine if you heard this news:

"I have good news for you, I think I can keep you alive and feeling well for the next year using this brand new therapy.

You'll have to travel to New York City every three weeks for check-ups and your medication, because I have the most promising innovative therapy to keep you off the "chemo junk" that almost killed you.

In the interim, you need to take 20 medications daily, including $150 eye drops and shots. You'll really need those eye drops, too. They're the cure to graft vs. host of the eyes, which will leave you blind and unable to realize the debt you're up to your eyeballs in.

Allot a minimum of $1,200 monthly for your health care expenses alone, because you'll be paying more than you get in social security disability benefits. Don't even bother having taxes taken out, because if you don't have money, you don't get treated. You need that money now, and with all your write-offs, you've paid your taxes and then some."

No, I don't think anybody else would take that as good news, not just physically but financially. I wish I knew six years ago what I know now. Take my advice, based off my own personal experience, and hopefully you can avoid the mistakes I've made or sidestep the horrendous practices that have nearly bankrupted me.

Ten Insider Tips to Avoid Medical Financial Ruin

1. Medical-related debt does not go against your credit rating! Breathe a sigh of relief if you are hoping to purchase a car or home. Your medical information is protected by law, HIPPAA and so are your medical expenses.

2. Know your insurance policies, all of them, inside and out: short term, long term, life and health insurance. Memorize the books and fight any charge that appears suspect. It's common practice to submit once to insurance, and if rejected, send the bill to the patient. Medical billing is difficult, and the first submission is often rejected due to incorrect wording. My PET scans were rejected because "restaging Hodgkin's Lymphoma" wasn't covered but "nodular sclerosing" was. Fighting saved me $3,000 a scan.

3. Failure to know your insurance policies and abide by them can result in fees later. My long-term disability insurance company sued me for overpayment, because it did not have my social security benefits to offset my wages. My husband put $8,000 on a credit card to pay while he sat vigil in the ICU beside my ventilated, near-dead body. Ignorance of the provision is not an excuse. Again, the sole option is a payment plan. Take the payment plan, do not put it on a credit card.

4. Avoid interest at all costs. We all hope we'll be fixed within six months, but if a six-month battle turns into six years, those finance charges will start to be more than your weekly budget for groceries. Hospitals, clinics, medical supply facilities will all offer interest-free payment plans. Take those, and if you're lucky, over time the agency will become tired of trying to collect on an old debt and write it off as a bad debt expense. When this happens, your bill is forgiven.

5. If battling the bills becomes too much, that doesn't mean the war is lost. Find a financial advocate immediately who will do the fighting for you. Cancer Connect http://news.cancerconnect.com/ will help you do just this, or ask any of the medical professionals you're surrounded by, especially nurses, social workers or case managers. You don't need the stress of fighting your disease and fighting to get treated.

6. If you made the mistake of using credit cards to pay for medical expenses, stop right now. It is illegal to deny emergency care for inability to pay. If you are in dire financial straights and need treatment, such as surgery or chemotherapy, talk to your doctor, nurse practitioner, nurse, secretary, social worker, human resource person. Someone will help you find financial assistance. Then proceed just as with any other debt, if you have high-interest credit card debt, pay that off first.

5. Do not ignore bills. Communicating with the hospital or clinic will keep the costs from going to claims. With the hospital, clinic, private practice, etc., you can set up a zero-interest payment plan at a cost you can afford. I worked out paying $20 monthly to both the hospital and clinic I attend, same as cash, for hopefully the rest of my long healthy life.

6. If your situation becomes so bad you can't pay the bills, remember medical bills do not hurt your credit, when an agency sends your bill to "claims," they are essentially paying for someone to harass you. These calls are awful and annoying, especially when sick, but that is all they are. Turn off your phone. Get a second private line. Get caller ID, and if you get really angry, fire back.

7. Consider reporting the agency that sent your bill to claims to the Better Business Bureau. Did they disclose legally-protected, private medical information to a third party without your consent? This is illegal. You're protected among the strongest of all healthcare laws: HIPPAA.

But if you really want something fixed, call your government representative or the Commissioner of Banking and Insurance. These elected officials represent you. They have the knowledge and connections to answer your questions. Though you may not speak directly to the official, you will speak with their specialists.

8. Shop for the most affordable and appropriate insurance. Yes, I said it: compare and save. The days of being tied to employer health insurance, COBRA or $20,000 out-of-pocket plans you don't need are almost over thanks to websites online that allow comparison shopping, just like searching for auto-insurance. Ehealthinsurance.com is an internet site that compares different plans side by side online.

Even better, if you're too sick, tired or busy to undertake the task of understanding and comparing plans that will suit you best, there are also sites that will match you with a person to assist you. NHAU.org, trustedchoice.com, as well as ehealthinsurance.com all provide help for people in need of sorting through plans to find out which suits the individual or family best.

9. Don't settle for a one-plan-fits-all strategy. You can now also mix and match plans within families when purchasing health insurance. If you have one family member who will probably live until 90 with no other problem than some hypertension, cut back a little on their coverage to take care of the spouse with arthritis, depression, fibromylagia and a family history of breast or ovarian cancer.

Along with this, if you know you'll be spending, use the benefits of a pre-tax Health Savings Plan to pay your high deductable or co-insurance. This way you don't have to give up any more money to taxes than absolutely necessary.

10. If you know exactly what needs to be done, what surgery you need or what treatment, you can now compare treatment costs between hospitals. Price compare with www.myMedicalcosts.com or search "compare hospital treatment costs."

Finally, if you're not just concerned about finances but quality of care as well, there is now http://www.hospitalcompare.hhs.gov/ that allows you to compare the success rates of different hospitals. You can find a few hospitals that are within your budget for treatment, find the one that will best suit your needs, and get treated with confidence that you are receiving the best care at the best cost.