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Need Help Paying Medical Debt? Here Are Your Options

Asking for a payment plan, using a medical credit card or hiring a medical bill advocate are among ways to pay off your medical debt.
December 21, 2017
Paying Off Debt, Personal Finance

The route to paying off medical debt isn’t as clear-cut as with other forms of debt, like a loan or credit card. There’s generally more room to negotiate the terms of repayment — and maybe even reduce the amount you owe.

To start, look over your medical bill and compare it with your explanation of benefits, if you have insurance. Figure out what you’re expected to pay and know that you can try to negotiate the total cost of the bill before moving on to repayment.

No matter what route you go, avoid medical debt mistakes like taking your bill at face value. Taking a smart approach to paying off your medical bills can help you manage this debt and avoid delinquent medical debt on your credit report.

Consider your options:

Payment plan
Medical credit cards
Medical bill advocate
Income-driven hardship plan
Negotiating costs on your own
Summary of options

When working with your provider, the most important thing is being upfront about what you can pay. If you don’t have insurance, you’ll likely be charged more than someone with coverage. Knowing there’s a price disparity can give you leverage.

“That can be useful for negotiation when you actually have to pay the bill,” says Chi Chi Wu, staff attorney at the National Consumer Law Center. “Tell them you’ll pay what BlueCross or Medicaid would pay.”

» MORE: Pay off your debt with a three-step strategy

If you don’t think you can afford your medical bills and are facing overwhelming debt, consider looking into debt relief options.

Payment plan

Many medical providers can work out a payment plan for your bills, including physicians, dentists and hospitals. This is one of the simplest and most common ways to resolve a bill you can’t afford in one payment.

You generally break the bill into multiple equal payments over a few months until the total is covered

You generally break the bill into multiple equal payments over a few months until the total is covered.

Tip: Ask if there are billing charges or any other fees associated with the payment plan, so you can assess the affordability.

Medical credit card

If your provider doesn’t take payment plans, they may accept medical credit cards. They’re generally for specific medical procedures, and many offices have applications on hand.

Many medical credit cards have an interest-free period of 6 to 12 months. Do the math to determine if you can pay off the debt within that period. If you can’t, you may be hit with a deferred interest rate that can make your debt significantly more expensive.

Tip: Know what extra costs you’d face if you’re hit with deferred interest to get a full understanding of whether a medical credit card makes sense for you.

Medical bill advocate

If you’ve had an extended stay in the hospital or an intensive procedure, you’re probably facing a mountain of medical bills.

You can hire a medical bill advocate to negotiate on your behalf. Advocates are experts in medical billing who know how to read medical bills and understand common costs for procedures. They can spot potential errors or overcharging and help you reduce the amount you owe.

Medical bill advocates can spot potential errors or overcharging and help you reduce the amount you owe.

Resources like Medical Billing Advocates of America can connect you with an advocate.

Tip: Make sure any fees charged by a medical bill advocate would be outweighed by the savings before signing up for a plan.

Income-driven hardship plan

If you have low income and high medical bills, you may be eligible for an income-driven hardship plan.

Similar to a standard payment plan, an income-driven hardship plan can break up the total amount you owe into more manageable, regular payments. You may also be able to reduce the amount you owe. Talk with your provider to see if it offers such a plan.

Tip: You may have to apply for Medicaid before being eligible.

Negotiating costs on your own

If your medical debts are in collections or you think you can take on the work of a medical bill advocate, you may be able to negotiate down the cost of your medical bills on your own.

For medical bills in collections, know that debt collectors generally buy debts for pennies on the dollar. That gives you some good leverage to negotiate.

For medical bills in collections, know that debt collectors generally buy debts for pennies on the dollar. That gives you some good leverage to negotiate.

If you think you can haggle with your provider, you may be able to take the work of a medical bill advocate into your own hands. Comb through your medical bills and spot any charges that seem wrong or too high.

You may be able to pair negotiation with another payment option.

Tip: Don’t be afraid to talk to your provider. Make sure you can afford what you agree to. You may have a choice between a lump sum and a payment plan.

Summary of medical debt payoff options

Payment optionBest if...
Payment plan: Your bill is broken up into monthly payments.
  • Your medical provider offers payment plans
  • You can't pay in full or could more easily afford the bill in monthly installments
Medical credit cards: A credit card you can apply for at medical offices upon receiving services. Generally for specific procedures.
  • Your provider doesn’t take payment plans but accepts medical credit cards
  • You can’t pay the bill in full
  • You likely can pay it off before the interest-free period ends
Medical bill advocate: You hire a professional to negotiate medical bills on your behalf.
  • You have very high medical debt or you suspect errors in your medical bills
Income-driven hardship plan: Some providers offer reduced costs to low-income patients who meet their criteria.
  • You have low income and you're struggling to cover your medical bills
Negotiating costs: You may be able to find a middle ground between what you’re being asked to pay and what you want to pay.
  • Your bills are unaffordable or you think you're being charged above usual rates
  • May be the best bet if your bill was sold to collectors
  • Can be used to reduce your bill before pursuing one of the payoff strategies above

What not to do

You may be tempted to jump at a quick fix for your medical debt — or to ignore it entirely. But doing so could cost you more in interest and may put your credit scores at risk.

Putting medical debt on an existing credit card is an example. That will appease your doctor’s office, but you’ll have interest to pay if you can’t pay the balance in full when your card statement arrives.

Ignoring your medical bills can send you down a delinquent debt timeline that can include debt collectors calling you and could result in a lawsuit.

As far as your credit reports are concerned, there is a bit of good news: There is a waiting period of 180 days before an unpaid medical bill will show on your reports. Further, medical accounts in collections that later are paid by health insurers will be removed from your reports.

Updated Dec. 21, 2017.