Millions of Americans struggle to pay their medical bills.

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According to the U.S. Census Bureau, 19% of U.S. households had medical debt in 2017. The median amount owed by those with medical debt was $2,000. The median amount owed by those with medical debt was $2,000. According to the same survey households with Black or Hispanic members were more likely to have it than households with White non-Hispanic members, and households with Asian members.

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What is a HELOC?

HELOCs are a great option for people who need cash. HELOCs are a popular tool because they allow people to access cash quickly,” Sarah Catherine Gutierrez (certified financial planner (CFP), CEO of Arkansas-based Aptus Financial, says.

HELOCs allow you to borrow against equity in your home, and then pay the debt off over a longer period of time, usually around 20 years. A HELOC allows you to borrow up to 15% of the equity in your home, which is the value of your home less your mortgage.

There are pros and cons to using a HELOC to pay medical expenses

A HELOC is a financing option that can help you finance major medical expenses. This is true even if your home is worth less than the mortgage. Before you apply for a HELOC, consider the pros and cons of using it to pay medical expenses.

HELOCs are a great option because they offer low interest rates and long repayment terms. Experts warn that HELOCs are not always a good option for replacing an emergency fund.

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Gutierrez warns that “I believe they’re too precarious.” It can affect the mortgage lenders and housing market when it is a collective emergency. She says that HELOCs can be frozen by many banks at once.

This was during the COVID-19 epidemic, when major banks such as Chase and Wells Fargo stopped issuing new HELOCs. Bank of America and other banks also imposed stricter credit requirements on borrowers to limit who was eligible for HELOCs during the pandemic.

The Most Expensive Medical Expenses

The cost of medical care can be higher if you don’t have any health insurance. These are the costs for common procedures and treatments that don’t require insurance according to PeopleKeep (a developer of software that helps employees manage their health benefits).

  • Broken leg: A cast can cost $863 if you have a broken leg.
  • Hospital Stay: You can expect to pay around $11,700 if you are required to stay overnight in a hospital for treatment or observation.
  • Pregnancy and delivery: Expect a high-priced bill if you’re expecting a baby. Normal pregnancy and delivery costs $18,847.
  • Kidney Stones: Kidney stones can be quite common. Kidney stones are formed when a small, hardened deposit forms in the kidneys. The average cost of treatment for kidney stones is $28,817
  • Appendectomy: This is the procedure that doctors perform to remove your appendix if you have appendicitis. The average cost of the procedure is $17,581.

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Three Tips to Avoid Medical Debt

Here are some ways you can avoid taking out debt to pay for medical expenses.

  1. Double-check your insurance coverage

If you do your research ahead of time, most cases your insurance will cover the majority. Dr. R. Ruth Linden (President of Tree of Life Health Advocates) says, “The first thing you should do is ensure that if you require preauthorization, you receive it and it’s at the highest benefit level to you are entitled to, and it’s in writing.” She adds that you should always double- or triple-check that your doctor is in network, your hospital is in network, and that your provider is in network.

  1. Utilize Your Health Savings account (HSA).

You may be eligible for an HSA if you have a high-deductible plan. You can contribute money to an HSA on a pretax basis to help pay for medical expenses. You can save money by putting your money in an HSA to pay for elective or necessary treatments. You can also roll the money you have contributed to an HSA into the next year to pay for future medical expenses.

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  1. Save for Future Care

Even if you don’t have an HSA, it is a smart idea to save money in a savings account for emergency expenses. If you are planning an elective procedure, save money to pay for it.