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If you’re facing a mound of medical debt, you’re not alone. According to a Kaiser Family Foundation/New York Times survey, 1 in 5 insured Americans has trouble paying their medical bills. That number nearly doubles for those without health insurance.

Medical debt affects people of all ages, and paying it off takes a different approach than paying off credit card or loan debt. There are a variety of strategies for paying down medical debt. Depending on your situation, you may be able to eliminate at least some of your medical debt without paying it.

This guide will help you understand the options available to you that can help you manage your medical debt and get relief if you need it.

Medical Debt Facts

Sources: American Journal of Public Health, Consumer Financial Protection Bureau, Kaiser Family Foundation, Nasdaq

Medical Debt Payoff Options

Paying off medical debt can be different than paying off loan debt. There’s room for negotiation and a variety of payoff, forgiveness and relief options that you can use to help manage your debt.

Payment Plans with the Creditor

A man speaks on the phone while looking at a medical bill. He is standing outside on some concrete steps next to a building.

If you’ve ever had a medical bill, then you may have been offered the opportunity to go on a payment plan to settle the debt. Payment plans can be a successful way to pay off debt as long as the plan is sensible and fits within your budget. Payment plans are not loans. Your bill is broken into smaller monthly payments with minimal penalties and low interest, so your debt is more manageable. For a successful payment plan, consider the following:

  • How much you can realistically pay each month towards your medical bills without negatively impacting your other finances.
  • Understand any billing charges or fees associated with the plan.
  • Pay your bills on time to keep your credit score high.

Debt Reduction and Forgiveness Through Self-Negotiation

It’s possible and common to negotiate your own medical bills. Sometimes a health care provider will work with you if you’re able to pay a certain amount of your bill upfront in cash. If you don’t have insurance, you can request that the provider furnish you with the payoff rate that those with insurance have. You can also ask about no interest payment plans. For some medical providers, collecting some money they’re owed is better than collecting none. If you can offer to pay a percentage of your bill, you can likely negotiate the rest into management payments or forgiveness.

Scrutinize Medical Bills

With any bill, you should closely monitor what you’re being billed for and make sure that your insurance has been appropriately applied. Always ask for an itemized billing statement and look for any treatment or medications that were never received, duplicate billing and other errors or places to reduce fees.

Enlist the Help of a Medical Debt Counselor and Advocate

A man wears headphones with a microphone while looking at the computer.

If you are feeling overwhelmed by your bills, you can use a counselor or advocate to negotiate your medical bills on your behalf. A good counselor will help go through your billing, work with your medical provider, set up a budget and come up with a personal plan for you. To be sure your counselor/advocate is legitimate, check that they’re accredited by the National Foundation for Credit Counseling (NFCC) or Financial Counseling Association of America (FCAA). You can work directly with either of those sites to find a counselor or advocate.

Medical Credit Card

As medical costs rise, financial institutions have started to create credit cards specifically designed to pay off medical debt. While these cards can help you conserve cash and, in some cases, provide immediate access to care if you need it, there are cons to consider. Keep a lookout for high-interest rates and having to pay for treatment in full up-front when you may not end up receiving full treatment.

Unsecured Loans and Debt Consolidation

A couple sits together at a table looking at their computer and discussing medical bills.

If your medical bills are too high to pay off via a payment plan, then you may be able to take out a personal loan or use debt consolidation. Personal loans are unsecured loans because they do not require collateral if the loan isn’t paid off, but they typically come with high-interest rates.

The same holds true for debt consolidation. Debt consolidation puts all your separate medical debts into one credit card or loan with a low-interest rate. You would then make one payment a month towards reducing the debt. However, you’re still likely facing a much higher interest rate than starting a payment plan directly through your doctor’s office, which may be able to offer a zero-interest payment plan.

Apply for a Hardship Plan or Financial Assistance

If you fall into a low-income bracket and have high medical bills, you may qualify for a hardship exemption or financial assistance through your hospital or healthcare provider. Many hospitals have assistance or charity programs to help offset medical expenses. In some cases, your local government or local nonprofit groups may also offer financial assistance options. You can discover these options by speaking with your provider and reaching out to your local agency.

Bankruptcy

A bankruptcy lawyer meets with clients in his office.

Another option for relieving medical debt is to file for bankruptcy. According to David Reischer, Esq., bankruptcy Attorney & CEO of LegalAdvice.com, medical bills are considered unsecured debts and can be eliminated through bankruptcy.

“In a Chapter 7 bankruptcy, a person may discharge all medical bills along with other general unsecured debts,” explains Reischer. “There is no limit to the amount of medical debt a person can discharge in Chapter 7 bankruptcy. However, to qualify for a Chapter 7, a person's disposable income must be low enough to pass a means test.”

There is also the option for filing for Chapter 13 bankruptcy. When you file for Chapter 13, your medical bills are combined with your other unsecured debt in a repayment plan by the court. “The amount that a person must pay towards general unsecured creditors depends on a person's income, expenses and any nonexempt assets,” explains Reischer.

Medical Debt Relief Options for Special Circumstances

Seniors, veterans and people in recovery may benefit from special options for relieving medical debt. It’s important to stay educated on different advantages available that are unique to your situation.

Seniors

A son helps his senior parents sort through their medical debt.

Approximately 85% of seniors aged 65 and above live with chronic conditions, which can lead to increased medical debt. Medicare and Medicaid are both designed to help seniors with their health care. Not only can they help provide relief for long-term health care, but they can also help lower out-of-pocket payments for medical expenses and bills. You can learn more about both of these programs on the official Medicare/Medicaid website.

The State Health Insurance Assistance Program, or SHIP, is a state-based program that offers local counseling and assistance to Medicare recipients and their families. SHIP can help with many different issues arising from medical care and costs, including advice on how to deal with medical bills.

Veterans

Depending on the situation, the Department of Veterans Affairs may provide reimbursement for medical care for service-connected veterans. In general, the two qualifying aspects include:

  • If a VA or other federal facility is not feasibly available for treatment.
  • The medical care was for a service-related disability.

Veterans can work with their local VA health care facility to learn more and for additional relief options.

People Recovering from Addiction or Serious Illness

A man sits on his couch and looks at his computer and his medical bills.

For someone who is recovering from addiction or an expensive medical diagnosis, like cancer, the debt accrued during treatment can be detrimental.

Sunrise House, an addiction recovery center, says that most treatment facilities include financial skills in their rehabilitation process.

If you’re facing expensive medical treatment, you can use the debt relief options discussed here, and you should also seek out national organizations that help with illness-related bills, such as the Cancer Financial Assistance Coalition (CFAC).

Dos and Don’ts for Medical Debt Relief

There are right and wrong ways to go about medical debt relief. While you have to find the strategy that works best for you and your situation, these are a few things you should and shouldn’t do when planning your medical debt relief.

Do
Don't

Speak with professionals, counselors, and advocates to come up with a payment strategy that works for you.

Completely ignore your medical debt. This could negatively impact your credit score and finances in the future.

Ask the medical office for no-interest payment plans.

Jump to adding your medical debt to an existing credit card.

Ask for an itemized billing statement.

Blindly pay your medical bills without assuring you’ve only been charged for the treatment you received.

Shop around for good rates if you need to take out a personal loan.

Jump at the first loan option available. Fully understand your interest rates, fees and repayment terms.

Seek out forgiveness options and negotiate your bills.

Assume you have no options. Medical bills come with a variety of relief options you should consider.

Advice From an Expert On Medical Debt

Adria Goldman Gross is the CEO of Medwise Insurance Advocacy. She has 30 years of experience in the insurance and advocacy field. Adria uncovers discrepancies in diagnostic or procedure coding, finds loopholes through which insurance companies attempt to deny claims, and helps attorneys, individuals and families resolve medical claim matters.

What is the biggest mistake people make when trying to pay off medical debt?

Adria Goldman Gross
Adria Goldman Gross:

A big mistake is people ignoring their medical bills until they get sent to collections. It’s best to work out how you can pay your medical debt (or determine if you can’t pay your debt) before it gets to the point of going to collections.

Paul E. Traynor
Paul E. Traynor:

Private healthcare providers have an interest in working with people who are unable to afford the health care they’ve received, so the biggest mistake people make is not working with the healthcare provider to find options to forgive or pay off medical debt. Most large healthcare organizations have programs that people can qualify for to assist them with medical bills.

If you feel like you can’t afford your medical debt, what options do you have?

Adria Goldman Gross
Adria Goldman Gross:

If you’ve gone through all of your options for paying for your debt and simply cannot afford it, I recommend you call the medical provider or even the doctor directly and let them know you can’t afford the bill. Even if you can’t afford your debt, if you start working on it and being proactive on trying to work out a strategy to pay your debt off, professionals will be more likely to work with you or even erase the debt.

Paul E. Traynor
Paul E. Traynor:

See the answer above. Contact the health care provider and work with them to determine your qualification for various programs that exist to assist people with medical debt they cannot afford to pay.

What precautionary steps can someone take to avoid medical debt?

Adria Goldman Gross
Adria Goldman Gross:

If you know you need medical treatment, do your research on that treatment. Call your insurance company and research doctors who are in your network. Then, I recommend calling those doctors and asking exactly how much you’ll get charged for your procedure. You’ll need to understand how your insurance will work, including any copays or deductibles. Find a doctor within your budget who can treat you.

If I don’t have insurance, what are my options for receiving medical treatment without going into huge debt?

Adria Goldman Gross
Adria Goldman Gross:

There are a variety of doctors, organizations, and hospitals in the U.S.that provide medical care for those without insurance. In New Jersey, we have a medical office that will see you and treat you free of charge as long as you have a job. We’re not the only state that has services like this and services available to those without a job and insurance. You just need to do your research. There are kind-hearted people and qualified doctors out there who will work with you.

Paul E. Traynor
Paul E. Traynor:

If you do not presently have health insurance because your employer does not provide it as an employment benefit and you do not qualify for Medicare, it is important to research your ability to qualify for a health insurance plan under the ACA or Medicaid.

Make a Plan for Your Medical Debt

A woman looks at her computer with a smile on her face. She is relieved to have settled medical debt.

Medical debt can be overwhelming but it’s not unmanageable. While no one likes being in debt, medical debt comes with a variety of forgiveness and relief options that regular debt does not, making it possible to pay it down in your own time. With the proper knowledge of options for paying medical debt, like understanding your bill, negotiating your debt, working with counselors and advocates and creating a budget, you can build a plan for getting out of medical debt for good.

Additional Resources

About Sara East

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Sara East is a freelance writer and content marketing professional based in Reno, NV. She has more than 10 years marketing experience in public relations, content and digital marketing. Sara has been a published writer for more than 10 years having written articles about finance, business, entrepreneurship, education, travel, real estate, insurance, healthy living, social media, travel and study abroad.

Sara's writing has been published in national news sites including Mashable, The Muse and The Next Web as well as on a variety of blogs. When she's not writing, Sara enjoys spending time with her fur kids exploring the mountains of Reno/Tahoe and enjoying the outdoors.

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