15 Things to Do When You Can't Pay Your Medical Bills

Today, nearly 50% of Americans are saddled with some amount of medical debt. Between complex insurance filing requirements and uncapped medical treatment costs, the U.S. has one of the most expensive healthcare systems in the world. It’s no surprise that so many of us struggle to pay back our medical bills.

While delinquent medical bills are treated differently than credit card debt or mortgages, unpaid medical bills can still be sent to collections where they could drag down your credit score. Here are a few tips for reducing the stress and burden of medical debt.

Before you tackle your medical bills, take a breath. Even if your medical debt goes into collections, it likely won’t impact your credit until 180 days have passed. Don’t rush into any payment plans and take time to explore how to manage your money and your debts.

Before entering into any payment arrangements, ask your treatment provider for an itemized bill. You want to see a line-by-line breakdown of what you’re being charged for, complete with the billing code and cost for each item.

Compare your bill with your insurance company’s explanation of benefits (EOB) and against your medical records. Keep an eye out for duplicate charges, amounts that seem too high, or tests that weren’t performed.

If you find any mistakes on your bill, let your provider and your insurance company know right away. Don’t be afraid to advocate for yourself here. It may take a few phone calls or in-person meetings, but you have every right to dispute erroneous charges. Don’t pay more than you should.

Currently, 33 states have some laws in place to protect consumers from surprise bills. This could include being billed for an out-of-network doctor during a medical emergency when there may not be an in-network provider available. If your state doesn't have laws like these on the books, you’re still covered by federal legislation.

If you think you’ve been given a surprise bill, dispute the amount with the treatment provider, and contact your insurance company. If you don’t reach a resolution this way, you may be able to file a dispute claim within 120 days of the date on your bill.

If the charges are accurate and in compliance with consumer protection laws, you may need to negotiate the balance owed. Before you do, you need to know what you can afford.

Do some careful budgeting, and see if it makes sense to pay off your debt right away or if you’ll need to pay in increments. It may be worth working with a financial advisor to determine the best course of action. Armed with that knowledge, you’ll be better prepared to resolve the debt without putting yourself in a tight spot.

You might not know this, but you can negotiate medical debt before it goes to collections. Explain your situation to your provider’s billing coordinator, and ask about balance reduction options. Specifically, you want to ask about paying the insurance rate, which might be less than what treatment facilities charge individual patients.

You can also ask your provider for an interest-free payment plan. This option is ideal if the negotiated balance is still too much for a lump-sum payment. Many facilities work with patients to determine an affordable monthly payment, so come prepared with a figure that works for your budget.

Once you’ve exhausted negotiation and payment options, see if your provider offers a financial assistance policy. The hospital may cut your bill in half or forgive it completely. However, you may have to meet their eligibility criteria first. If you don’t qualify for financial assistance, you can search for medical debt consolidation or debt relief organizations in your area.

Crowdfunding campaigns for medical treatment have become increasingly popular in recent years. Sites like GoFundMe let you create an online fundraiser and get donations from people all over the world. There’s no guarantee that you’ll receive enough to cover the full cost of what you owe, however, so it may not be wise to rely solely on crowdfunding to pay you medical debt.

If you’re able to, you can try getting a second job, a side hustle, or picking up extra shifts at work. While the long hours may be inconvenient or straining, the additional income can help you reduce your medical debt faster or keep your debt from being sent to collections.

You might consider shopping around for one of the best personal loans to pay off your medical bills. Weigh the risks carefully, though, as you’re just shifting the debt from one place to another here. You also won’t have the same protections if you fall behind on loan payments, however, since it’s no longer considered medical debt but regular consumer debt.

If you don’t qualify for a personal loan or simply don’t want one, you can look into credit cards instead. The best credit cards for medical bills offer the same consumer protection trade-off as personal loans. A key difference, though, is that credit cards often have higher interest rates than loans. Consider the long-term costs of shifting your medical debt to a credit card before you go this route.

If worst comes to worst and your medical bills are sent to collections, educate yourself on your legal rights. Remember that you still have a 180-day grace period to explore debt management or debt settlement options.

Furthermore, debt collectors can’t harass you with a zillion phone calls, nor can they call you before 8 a.m. or after 9 p.m. They also can’t threaten you and they’re legally required to prove the legitimacy of the debt. Some will try to pressure you to pay them immediately but don’t cave. You have more power than they want you to think.

While medical collections do hurt your credit score, they may not carry the same weight as other types of debt. They could also drop off your credit report once they’re paid (though not always). Armed with that information, you can try to negotiate a payment plan or settlement with the collection agency. Before you send them any money, however, get the agreement in writing.

Ultimately, you may need to declare either Chapter 7 or Chapter 13 bankruptcy. Chapter 7 is available for people whose income falls under a certain threshold and who can’t reasonably pay back their debts. Chapter 13 is akin to an extended, court-mandated debt repayment plan. Under Chapter 13 bankruptcy, your total debt can’t exceed a specified amount, and you must have a regular income.

Both bankruptcy options are legally binding, and both affect your credit. Still, if your medical debt has become unsurmountable, bankruptcy may be the best way to resolve your debt once and for all.

As you work through your own medical debt, remember that this debt doesn’t mean you’re financially irresponsible; it just means that you’ve encountered hard times. Take account of your current finances, research the strategies that make sense for you, and stay the course.