When Insurance Isn’t Enough: Exploring Ways to Cover Medical Costs

Tap Into Online Personal Loans 

When faced with a staggering medical bill, many people often think first of applying for a bank loan. However, the reality is that banks tend to be quite demanding. They require low debt-to-income ratios, stable income histories, and excellent credit scores. Those who carry existing debt or have had past financial problems may find it hard to get approved. 

If you’ve ever wondered how to get a loan when no one will approve you, online personal loans can be a solution. Many digital lenders use flexible criteria, such as income potential, and some even focus on helping bad-credit borrowers with fair, predictable terms. 

What’s more, taking out an online personal loan is much faster, too. Rather than waiting for days or weeks for a bank’s decision, an online application may get you an approval within hours. Also, funds can be deposited in your account right away. This is especially helpful when urgent medical costs cannot wait. 

Withdraw from Retirement Savings 

Retirement funds are not limited only to your latter years in life; they can act as an emergency source of funding when medical bills become more devastating than anticipated. There are a few means of tapping into these funds that the IRS permits without entirely disrupting your finances, though these all have significant trade-offs. 

401(k) Loan 

Depending on whether your employer permits it, you may borrow up to $50,000, or half your vested balance, whichever is lower. But you will miss the opportunity to grow your investments over the repayment term. And in case you quit your work in the middle of the repayment term, the balance may be due right away,  converting it into a taxable withdrawal. 

Hardship Withdrawal 

This option allows individuals to repay funds permanently. It is taxed as income, and may be subject to an early withdrawal penalty of 10% should you be under 59 ½ years old. That penalty may be avoided when the withdrawal is applied to qualifying medical expenses above 10 percent of your adjusted gross income. 

Government Programs and Other Savings Vehicles 

Government programs like Medicare and Medicaid can eliminate or significantly reduce out-of-pocket expenses, depending on eligibility. Veterans may also qualify for coverage through the VA Health System, which provides a broad range of medical services at reduced or no cost. 

Other tools include: 

By exploring these programs, you make sure no available healthcare dollars are left unused. Even small contributions can accumulate into meaningful support when unexpected medical bills arise. 

Seek Charity Care 

A lot of hospitals--primarily nonprofit hospitals have Charity care or financial assistance programs that can eliminate or at least reduce your medical expenses, provided you fit into some income qualification criteria or some hardship criteria. The Affordable Care Act stipulates that nonprofit hospitals must commit to a written financial assistance policy and make it available to patients. 

To access this help: 

Even partial forgiveness can make a massive difference, especially on large bills after insurance. 

Bridging the Coverage Shortfall 

Insurance often falls short on covering medical bills, and that gap can be overwhelming. Fortunately, many options are available to help you bridge that shortfall, from personal loans to charity care. Prepare in advance, seek all available resources, and be ready, so unseen expenses do not break your budget, or even your health.