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The words you choose are critical when deciding the ideal plastic surgery financing option. Do not confuse this closely related specialty with cosmetic surgery.

Plastic surgery reconstructs facial and body defects and is often medically necessary, which means health insurance could pick up most of the tab – except for the deductible and other unreimbursed expenses.

Only one option, personal loans, gives you complete freedom to pick the surgeon with the best credentials and lowest price via in-network insurance discounts.

Also, medically necessary plastic surgery is tax-deductible, which allows patients with lousy credit to get an interest-free loan without a credit check.

Plastic Surgery Financing Options

Plastic surgery patients enjoy financing options that are more amenable when health insurance picks up the lion’s share of expenses. Medically necessary procedures often qualify for coverage (see the next section below).

Funding the deductible and other unreimbursed expenses is much easier because the amounts are so much smaller. Plus, similar rules regarding tax treatment open a loophole that allows interest-free loans for all patients – even those with bad credit.

Personal Loans

Personal loans are the preferred financing option for plastic surgery because, if approved, the lender deposits money into your checking account. Having cash in the bank enables you to choose the physician meeting two crucial criteria.

  1. Has the right training, education, experience, and practice history
  2. Participates in your insurance plan as an in-network provider

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Keep the requested amount as small as possible to keep your projected debt-to-income ratio low. Only borrow what you need to fund the insurance deductible and other left-over expenses if you are undergoing something similar to these frequently medically necessary reconstructive procedures.[1]

Breast Reconstruction

Implant removal

Reduction mammoplasty

Post-mastectomy

Congenital Anomalies

Cleft lip and palate

Head reshaping

Nasal stenosis

Hand Restoration

Carpal tunnel

Rheumatoid arthritis

Dupuytren’s contracture

Other Categories

Necrotic skin removal

Chronic headache relief

Deviated septum

Droopy eyelid (blepharoplasty)

Personal loans are installment contracts, which means that you repay the lender in equal monthly payments over a fixed period. For example, you might have a $300 payment plan lasting three years if you borrow $3,000.

Medical Credit Card

Medical credit cards can help you finance plastic surgery via a revolving arrangement. Revolving contracts provide a preset borrowing limit and flexible monthly payments.

Medical credit cards work well for smaller ongoing expenses because your open to buy (limit minus balance) goes up each time you make payment. Plus, well-qualified patients can take advantage of zero-percent promotional offers.

However, medical credit cards have four notable downsides.

  1. Revolving debt swells over time when making only the minimum payment
  2. Promotional offers charge “deferred interest” of 27% if you fail the retire the entire balance before the end of the defined period
  3. You add a third narrowing criterion to your list of surgeons
    1. Has the right training, education, experience, and practice history
    2. Participates in your insurance plan as an in-network provider
    3. Accepts payment from the medical credit card issuer
  4. Only one company reviews your borrowing qualifications

In-House

Looking for a plastic surgeon that offers in-house payment plans puts you in the same three-criterion box. You are adding an unnecessary qualifier to two more critical yardsticks.

  1. Has the right training, education, experience, and practice history
  2. Participates in your insurance plan as an in-network provider

Besides, would you choose a bank based on whether they performed breast reconstruction, skin removal, or septoplasty? Of course, you wouldn’t, because these are two completely different specialties.

Practices that offer “in-house payment plans” outsource the function to third-party patient finance companies such as Care Credit, United Medical Credit, Prosper Healthcare, Capital One, and others. You have to apply to each company separately to see if you qualify.

Bad Credit

Financing plastic surgery when you have an adverse credit history is more accessible because you can take advantage of an overlooked feature in the tax code.

Your unreimbursed expenses should be tax-deductible when the operation addresses the diagnosis, cure, mitigation, treatment, or prevention of disease. In turn, the favorable tax treatment then allows you to take advantage of a little-known feature of a Flexible Spending Account (FSA) under IRS rules.

No Credit Check

An FSA loan from your employer enables people with bad credit to finance plastic surgery without a credit check. There is no minimum score needed to qualify because IRS rules require that, if offered, all employees have the opportunity to enroll. Employers cannot pull a copy of your consumer report or look at your FICO score.

Choose to contribute to an FSA during open enrollment. Then, schedule your elective reconstructive procedure early in the new plan year. Your employer must reimburse all qualifying expenses immediately, and you have up to 52 weeks to repay the amount.

Interest-Free

An FSA loan is the only place where bad credit borrowers can finance plastic surgery interest-free. Your employer cannot impose origination fees or charge you for the use of their money. Plus, by making pre-tax payroll contributions, you give yourself a hefty markdown in the form of tax savings.

Pre-tax contributions reduce your reportable income, which lowers three types of government levies you might otherwise pay.

  1. Federal income
  2. State income
  3. FICA

Guaranteed Approval

An FSA loan for plastic surgery comes the closest to offering guaranteed approval – even to bad credit patients. No entity can assure that they will lend money to every applicant regardless of their credentials or financial capacity – unless they include a loophole in the fine print.

For example, one site touting “guaranteed approval” requires that the patient fund 80% of the costs. The amount they “lend” (20%) is perhaps well within the profit margin of the practice, which is not much of a promise at all.

On the other hand, the FSA plan administrator has a legal obligation under IRS rules to approve every qualified expense. Many reconstructive procedures fit squarely into this category. However, some could fall into a gray area, which is why the guarantee is not 100%.

Plastic Surgery Covered by Insurance

Your choice of words matters most when trying to get your private health insurance to pay for plastic surgery, which is often medically necessary. Procedures that reconstruct facial and body defects due to birth disorders, trauma, burns, and disease fit the category for claim approval.

However, do not confuse these distinctions with cosmetic surgery, which enhances your appearance by improving aesthetic appeal, symmetry, and proportion through the reshaping of healthy tissue. Insurance routinely rejects these claims.

Discounts

Plastic surgeons who are in-network with your insurance plan provide discounts called “allowed charges.” Large companies negotiate lower prices with providers who agree to accept the reduced fees as full payment in exchange for patient volume.

Pull out a recent “Explanation of Benefits” statement to learn how these negotiated discounts work.

  • Provider charge: is the higher retail rate imposed by out-of-network surgeons
  • Allowed charge: is the lower negotiated wholesale price accepted in-network

Once again, your choice of words matters when exploring negotiated discounts on physician fees.

  • Out-of-network surgical centers “accept” insurance payments and then balance bill patients for the difference between the higher retail rate and the lower wholesale price.
  • In-network providers “participate” with the plan and cap their fees at the negotiated wholesale rate that is always much lower.
  • Doctors participate with plans and not companies. For example, they could be in-network for one Blue Cross Blue Shield (BCBS) plan but not another.

Therefore, verify these details before starting your procedure, and factor in the discount prices into your smaller financing request if you choose an in-network provider.

Almost Free

Having your insurance plan pay for plastic surgery does not mean the procedure will be free of charge to you. Every plan has cost-sharing features in addition to the largest one that gets the most publicity: the annual deductible.

  1. Yearly deductible: the member-funded amount before benefits begin
  2. Co-insurance: share of the allowed charges paid by the patient
  3. Copayment: fee paid by the member after each doctor visit
  4. Maximum out-of-pocket: annual limit of member-funded allowed charges

Therefore, your procedure can only be completely free if you have already reached the maximum out-of-pocket figure for the year, and you pick an in-network provider. Estimate each of these unreimbursed expenses in addition to the deductible when choosing the amount to finance.

Medicare

Medicare covers plastic surgery when the procedure fits the definition of medically necessary, which the government defines as the services and supplies related to your medical condition that are:

  • Proper and needed for the diagnosis or treatment
  • Provided for the diagnosis, direct care, and treatment
  • Meet the standards of good medical practice in the local area
  • Not mainly for the convenience of you or your doctor[2]

For example, Medicare is likely to cover plastic surgery after MOHS skin cancer procedures because it is part of the treatment for dread disease and meets standards of good medical practice.

Medicaid

Likewise, Medicaid pays for plastic surgery when medically necessary following a similar definition. However, because states administer the public program in conjunction with the federal government, the rules can vary quite a bit depending on where you live.

Therefore, patients should verify with their state-based Medicaid provider about possible coverage for borderline procedures similar to any of these.

  • Mole removal of precancerous lesions
  • Skin removal after weight loss (Panniculectomy)
  • Septoplasty for a crooked nose that affects breathing

Footnoted Sources:

[1] American Society of Plastic Surgeons: Reconstructive Procedures

[2] Centers for Medicare & Medicaid Services: Definitions