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6 Ways to Pay Off Your Medical Debt

Asking for a payment plan, using a medical credit card or hiring a medical bill advocate are a few of your options.
Aug. 3, 2018
Paying Off Debt, Personal Finance
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The route to paying off medical debt isn’t as clear-cut as with other forms of debt, such as a loan or credit card. There’s generally more room to negotiate the terms of repayment — and maybe even to 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, but don’t make the mistake of taking your bill at face value: You can always try to negotiate the total cost first.

Taking a smart approach to paying off your medical bills can help you avoid delinquent medical debt on your credit report.

Consider your options:

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

When working with your provider, be upfront about what you can pay. If you don’t have insurance, you’ll likely be charged more than someone who does. 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 you’re facing overwhelming debt, consider looking into debt relief options.

1. Payment plan

Many medical providers, including physicians, dentists and hospitals, can work out a payment plan for your bills. 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.

2. Medical credit cards

If your provider doesn’t take payment plans, it 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 six 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 fully understand whether a medical credit card makes sense for you.

3. Unsecured credit options

Personal loans

A personal loan can consolidate multiple medical debts into one payment. But it can be an expensive way to cover medical bills, and you’ll need excellent credit to qualify for the lowest rates.

Getting a personal loan may be best after you’ve exhausted other options, such as a payment plan or medical credit card. Loan amounts range from $1,000 to $100,000, so they can be beneficial for large amounts of medical debt.

Tip: Be sure to shop around to compare rates, fees and repayment terms.

0% interest credit card

A 0% interest credit card could be a good option if you aren’t eligible for a payment plan or medical credit card. You’ll need good to excellent credit to qualify, though. Be sure to pay off your balance before the promotional interest period ends and an interest rate kicks in.

Tip: Dedicate the card only to medical bills if you do go this route. Otherwise it’ll be harder to keep records of the expenses for tax deductions or a medical savings account.

4. 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.

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

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

Groups such as 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.

5. 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.

6. 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 do. 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 can 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 off the debt before the interest-free period ends.
Unsecured credit options: Personal loans and 0% interest credit cards to help cover medical costs.
  • You’ve exhausted other options.
  • You have good to excellent credit.
  • You want to consolidate multiple debts.

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 high 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 higher than usual rates.
  • May be the best bet if your bill was sold to collectors.
  • Can be used to reduce bill before you pursue 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 typically will face a double-digit interest rate 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, here’s a bit of good news: There is a waiting period of 180 days before an unpaid medical bill will show on your credit reports. Also, medical accounts in collections that are paid later by health insurers will be removed from your reports.