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Handling Medical Debt

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For many, medical bills are an unexpected burden. Emergency trips to the hospital, unforeseen accidents, and medical issues can really take a toll on your finances. Many households have incurred pandemic-related medical debt. When you have no insurance or inadequate insurance, the cost can be overwhelming. But there is hope. Medical debt can be easier to resolve than other forms of debt. In general, the debtor may have more room to negotiate repayment terms and possibly reduce the amount owed. If you’re struggling with medical bills, here are some ways to help get out of medical debt.

Look Over the Bill

The first step is to look at what you owe. Medical billing errors, like duplicate charges for the same procedure or charges for services not received, are very common. Review the medical bill closely. Ask for an itemized bill and check for any errors or discrepancies. If you don't understand a particular charge or amount, contact your provider right away for an explanation. If you have insurance coverage, compare your medical bill with your insurance explanation of benefits. You may discover you are covered for the procedure or service you’re being billed for. Contact your medical provider or insurance company right away if you notice incorrect charges or the cost seems too high.

Negotiating Your Costs

Before you have a procedure, discuss the costs with your medical provider. Even after you’ve received a service you can ask your medical provider to adjust your bill. Oftentimes hospitals and medical offices charge the maximum amount, especially if you’re uninsured. Ask if the rates can be lowered down to what insurance would pay. If you can show that paying the amount in full would be difficult based on your financial situation, you may qualify to have the bill reduced. Even if you have enough to cover the debt, it’s worth a chance to ask the provider for a discount if you pay the amount in cash or by check.

Requesting an Affordable Payment Plan

Once you have determined how much you owe, it’s time to calculate the best way to pay off the debt. Go over your budget to see how much you can afford to make in payments. Many providers will arrange for low or no interest payment plans to settle the debt. Negotiate the terms of repayment and get the information in writing. Ask if there are any additional billing fees or charges associated with payment plan arrangements.

Individuals with low income may qualify for an income-driven hardship plan. If eligible, this type of assistance may forgive a portion of your debt and divide the remaining balance into smaller payments. You may need to apply for Medicaid to qualify. If you believe you qualify, ask your provider for details.

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Medical Bill Advocates

Medical bill advocates are experts in medical billing that you can hire to help you with your medical debts. They can review your health care bills, file appeals with your insurance company, and negotiate with your medical provider to lower your bill or set up a repayment plan. Typically, you will only need the services of a medical bill advocate if you have a large amount of medical debt. You can find a medical bill advocate by searching groups like the National Association of Healthcare Advocacy, the Alliance of Claims Assistance Professionals, and the Alliance of Professional Health Advocates. Before hiring an individual or company to help with your medical debt, check out their reputation, comparison shop, and select the best option for your needs.

Charities and Financial Assistance

Many providers have referrals to local charities or financial assistance programs to help pay off medical debts. Non-profit hospitals are required to have financial assistance programs in place. If you qualify for assistance, you may have the debt reduced or even forgiven. For a list of charities that may offer assistance, visit Charity Navigator.

Using Medical Credit, Credit Cards, or Personal Loans

Medical credit cards can be used for eligible healthcare services. They can be helpful to cover medical expenses if a payment plan isn’t an option. The medical credit card may offer interest-free options for up to 12 months that will allow you to pay off the debt to your provider and make payments on the amount.

Another option may be transferring the debt to a traditional credit card. Be mindful that doing so may affect your credit. Only use credit to cover the debt if you are sure you can manage payments.

Medical loans for medical expenses may help you pay for healthcare expenses. Carefully read the terms so you are aware of the interest rates, payments, and other requirements involved.

These options should only be considered as a last resort.

Handling Medical Debt in Collections

While you should try to take care of medical debt as soon as possible, if the account goes to collections there are things you can do. When the collection agency contacts you, verify that the debt is accurate. The collection agency has to send you proof of the debt within five days of you requesting it. Review the information to make sure it is accurate. If you find errors in the bill or disagree with the amount owed, you can dispute the collection. Contact the collection agency, your provider, or insurance company to discuss the matter.

If possible, speak to the collection agency about a repayment plan or debt reduction. Don’t pay more than you owe and don’t enter a payment arrangement with terms you can’t meet. This could lead to more debt. Take time to consider your options and make a sound decision based on the information provided.

Protection against Surprise Bills

On January 1, 2022, the “No Surprises Act” went into effect, protecting consumers from surprise medical bills from out-of-network providers. For example, in emergency situations you may be unable to choose which hospital you are taken to or you may receive treatment from a doctor that isn’t in your network. If you are insured and get care from an out-of-network provider or at an out-of-network facility, your health plan may not cover the entire out-of-network cost. Previously, the out-of-network provider or facility could bill you for the difference between the charges the provider billed, and the amount paid by insurance, referred to as “balance billing”.

The No Surprises Act:

  • Bans surprise bills for emergency services.
  • Bans out-of-network cost-sharing for all emergency and some non-emergency services. You can’t be charged more than in-network cost-sharing for these services.
  • Bans out-of-network charges and balance bills for supplemental care (such as anesthesiology or radiology) by out-of-network providers who work at an in-network facility.
  • Requires that health care providers and facilities provide an easy-to-understand notice, explaining that getting care out-of-network could be more expensive, along with options to avoid balance bills.

If you are uninsured or choose to pay out-of-pocket for medical care, the No Surprises Act ensures that you receive a “good faith estimate” of how much your care will cost before you receive care.

For more information on the No Surprises Act, visit

Do's & Don’ts

Handling debt can be stressful and draining. But avoiding it can cause more problems. Here are some do's and don’ts to help you avoid unnecessary issues:

  • DON’T avoid medical bills or ignore collection attempts.
  • DO review the bill for accuracy.
  • DO speak with your medical provider or collection agency about the debt.
  • DON’T be afraid to explain your financial situation and negotiate with your medical provider or collection agency to resolve your debt.
  • DO seek financial assistance that may be available to help with your debt.
  • DON’T agree to repayment terms you can’t afford.
  • DO make all payments on time and make contact right away if you have a problem making payments.
  • DON’T take out personal loans or seek other credit until you’ve exhausted other options.
  • DO seek the assistance of a debt counselor for more advice on your debt obligation.

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About Business Consumer Alliance Business Consumer Alliance (BCA) is a non-profit company that started in 1928. The broad purpose of BCA is to promote business self-regulation. BCA's mission is achieved by assisting consumers in resolving complaints with businesses and using that complaint information, along with other relevant information such as customer reviews, to forecast business reliability. With community support, BCA can identify trustworthy and ethical businesses and warn the public to avoid unscrupulous businesses whose purpose is to defraud the marketplace. BCA also helps businesses promote themselves by providing services and tools to protect their business and reach out to their customers. BCA obtains its funding from member businesses who support the mission and purpose of the organization and who agree to abide by high standards of ethical business practices.