Over 65 and Drowning in Medical Debt? 10 Strategies To Eliminate It

Medical debt is a fact of life for many people over the age of 65. With retirement costs, rising inflation, and other factors that require pulling out the checkbook, it is easy for bills like these to pile up. 

Fortunately, there are ways to reduce or even eliminate these obligations. Here are 10 strategies you can use to get out of debt as a senior.

A credit counselor can review the details of your medical debt situation and help you create a debt management plan.

Typically, this involves creating a payment schedule that suits your budget. In some cases, credit counselors might also help you land a lower interest rate or work to get certain fees waived.

Most people who are 65 or older turn to Medicare to help manage health care costs. If you are among them and receive a bill you cannot afford, turning to the Medicare appeals process might be a smart move.

According to the federal government, you can use the appeals process if your plan refuses to cover a health care:

• Service
• Supply
• Item
• Drug

There are five levels of appeals. As you move through the process, you will learn how to move to the next level of appeal should you need to do so. The Medicare.gov website offers instructions for how to appeal based on the nature of your Medicare coverage.

Depending on how the appeal process plays out, you might walk away with steeply reduced or even eliminated costs.

Eligible seniors may find that a Medicare savings program can help them reduce medical costs. Eligibility is based on income and resources.

There are four different ways to save under Medicare savings programs, which may help you reduce costs on deductibles, coinsurance, copayments, and Part A and Part B premiums.

Additionally, the Medicare Extra Help program might help you pay for expenses related to Medicare Part D, which covers prescription drugs.

Many hospitals offer charity care or financial assistance programs designed to help those who are unable to pay their entire bill.

While the details of these programs vary from hospital to hospital, it's often possible to qualify for financial assistance in covering medical bills. Get in touch with the bill department of the hospital to find out what assistance it might offer.

Prescription drug costs can add up quickly. If you cannot afford to purchase medicine, you might qualify for a prescription assistance program that a pharmaceutical company offers.

You can contact one of these companies directly or use a platform such as the Patient Assistance Program Center's Rx Assist to seek out assistance programs for which you might qualify.

Although you can expect some level of paperwork, success in this request could make a big difference to your budget.

Some seniors may qualify for Medicaid. Generally, eligibility is based on your income and family size, although rules differ from state to state, according to the U.S. Department of Health and Human Services.

If you do qualify for Medicaid, this support could help you cover medical costs and keep you from incurring debt.

State social services agencies sometimes offer direct financial assistance to people who struggle to afford health care. Services vary from state to state.

Even if the state social service agency cannot help you directly, it often can point you toward local organizations that will help. This may include local health care centers that offer financial assistance programs or a local charity designed to help seniors cover medical expenses.

If you have a lot of medical debt but are still working, consider delaying your retirement date. This will buy you some time to bring in more cash that you can direct toward debt repayment.

If you really want to supercharge your debt-repayment efforts, keep your full-time job while also working part-time or starting a side hustle that can help you earn extra income for paying bills.

Working a little harder now can have a huge payoff that helps you retire with little to no debt.

Many seniors have significant equity in their homes. One way to eliminate medical debt is to tap into that equity and use the proceeds to pay bills.

Some folks might use a home equity line of credit to free up cash for this purpose, but downsizing could also offer a way to get rid of medical debt without the need for a second mortgage.

For example, if you sell your house and buy a cheaper place, you might walk away with some of your existing home equity in cash. You could then direct this influx of funds toward eliminating outstanding medical debt.

Finally, medical debt can be discharged through bankruptcy. If you truly cannot afford to repay the debt and you have run through your other options, filing for bankruptcy might be worth consideration.

However, this is a big step that can have major repercussions in your financial life. It can be especially damaging to your credit score and might limit your financial options for several years. Before moving forward with bankruptcy, consider discussing your options with a financial advisor.

Carrying around medical debt as a senior can make enjoying your golden years difficult. But fortunately, you have options for putting this debt behind you.

By exercising the right options for your situation, you can reduce medical debt and boost your financial fitness.