How to financially prepare for unexpected situations you can’t afford.

Nobody wants to think about having a medical emergency such as ending up with a broken arm. As much as we like to avoid these topics, however, they are unfortunate realities that tend to happen at the least convenient times and when we least expect them.

When it comes to broken bones, for instance, did you know that without health insurance, diagnosis and non-surgical treatment for a broken arm typically costs up to $2,500 or more? And even if you do have health insurance, costhelper.com explains, “Costs could include doctor visit copays and coinsurance of up to 30 percent or more for treatment.” Ouch! This sounds painful for the arm and your pocket. Fortunately, we have covered a few ways in which you can stay ahead of the game and prepared for medical expenses.

Here’s how you can be proactive and anticipate the unexpected if you or a family member ends up with a broken arm:

1. Know how much your insurance will cover: If you have health insurance, that’s great! But as mentioned above, it is likely that your insurance won’t cover the entirety of your broken arm treatment costs. A good rule of thumb is to always contact your health insurance agent to find out exactly what’s being covered and why. If you have a better idea of how much they will cover, you’ll be able to start figuring out how much you’ll have to pay yourself.
2. Know how much you’ll have to pay out of pocket: Once you know how much your insurance will cover, make a list of all the expenses associated with your broken arm. Cost of emergency room visits, X-rays, therapy, medicine and follow-up trips to the doctor’s office could be coming right out of your own pocket, so it’s important to know exactly what the damage is and how long it will take you to pay it.
3. Consider taking out a medical loan: Paying off your out-of-pocket expenses after a broken arm can be hard. We get it. That’s why medical loans can be the best solution to avoid hurting your financial situation — and credit score — for an extended period of time.
4. So what’s a medical loan? A medical loan is simply a personal loan for medical financing. Nerdwallet.com explains that “Medical loans — which are personal loans applied toward medical expenses — can be used to consolidate existing medical debt, cover emergency or planned medical procedures like root canals or plastic surgery, or pay for high deductibles and out-of-network charges.”

Why you should stay away from using credit cards for medical bills

Personal loans for medical expenses are often a better option than credit cards, as you’ll know exactly how much you owe (refer to step number two) and your final amount won’t keep increasing as you keep swiping your card, which is referred to as revolving credit. Click here to learn more about the difference between loans and other forms of credit.

Additionally, depending on your credit score and financial history, you might be able to receive better terms from the lender, avoiding high-interest rates and unfavorable terms of repayment that will end up hurting your credit score.

Not sure why high credit card usage might be hurting you? Visit this Credit Karma article to find out how your credit score might be suffering due to credit card usage.

Are there alternatives to credit cards for medical expenses I can explore?

Absolutely! To avoid finding yourself in a situation where you have to get in debt to pay off an emergency procedure, you should always be saving. Did you know that, according to this Savings 101 article, saving as little 20% of your income you could save as much as $8,000 a year based on a $40,352 annual income? If you take your budget seriously and stick to it, a medical loan might not even be necessary in case of a broken arm!

The Next Steps

Have you found yourself drowning in medical debt after simple broken arm treatment? Don’t let this ruin your financial situation and credit score! 

*Material on this page is for informational purposes only and should not be construed as medical advice.*