Let’s face it — the financial burden of medical care in America can be immense.

According to Debt.org, Americans spent around $1.1 trillion on hospital services in 2017, and the average cost of a hospital stay was $15,734. And if you’re sent to the emergency room for critical care, you could leave with a bill of $20,000 or more.

If you aren’t prepared to spend that kind of money, you can mess up your finances. Here’s how to avoid medical debt by planning for medical expenses.

Get health insurance

A quality medical plan can help you tackle high medical bills by negotiating the total cost of your bill with your hospital and then paying some, if not all, of the eligible expenses. They’re available as public or private plans. Federal and state governments offer public medical plans, while the health insurance industry offers private plans.

Private plans can be more expensive than public ones, but they often come with a wider selection of health care providers to choose from and offer more medical coverage.   

Consider a medical credit card for unexpected expenses

You can apply for medical credit cards — specialized credit cards you can use to pay for specific medical expenses — through your health-care provider or online. They offer introductory low- to 0 percent interest periods, ranging from 6 to 24 months, to help cardholders pay off their balances in full quickly without racking up interest.

But be careful to pay that balance off before the promotional period expires: Interest rates can skyrocket, often as high as 25 percent.

Set up an emergency savings account

Emergency savings accounts are savings funds you make contributions to for the sole purpose of covering expensive surprises. You can set one up using a high-yield savings account, a popular option for emergency savings, available through most banks and online.

These are savings accounts that earn more interest than others — interest rates of high-yield savings accounts float around 1 to 1.35 percent, some even higher, while regular savings accounts rest around the .01 percent mark.

Let’s say you open a high-yield savings account with a 1.35 percent annual interest rate (compounded monthly), drop $5,000 into it, and contribute $100 to it every month. After five years, you’ll have saved $11,559.45.

Now, let’s say you open a regular savings account with a .01 percent annual interest rate (compounded monthly), and drop the same initial amount in it, and make the same monthly contributions. After five years, you’ll have saved $11,004.03. 

Pro tip! The best way to mitigate financial damage from medical expenses is to combine financial products, if you can. For example, an emergency savings account can help clean up the rest of an expensive medical bill if a medical plan didn’t take care of the total cost of the bill. Similarly, you can pay your bill with a medical credit card and then pay its balance using an emergency savings account.

The bottom line

You don’t have to dread heading to the hospital. Avoid medical debt by planning ahead. This will help keep your wallet’s health in check. Be sure to check out this article to find out more ways you can manage medical debt.

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