How to Pay Off Unexpected Medical Debt

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If you're struggling to pay off medical debt, there are steps you can take to reverse the course. You don’t have to let medical debt take control of your life. Here's how to pay off your medical debt and get back on track.

Medical debt is a reality for almost one-third of America’s workforce.

A recent survey by The Commonwealth Fund showed that 32% of working Americans have outstanding medical debt.[1] What’s more alarming is that 54% of those people with medical debt said they defaulted on it.

If this sounds like your current situation, or it quickly could be, there are steps you can take to reverse the course. You don’t have to let medical debt take control of your life, your finances, and your stress level.

Don’t Ignore Your Medical Bills

Ignoring your medical bills can cause significant stress and have negative financial consequences.

It can hurt your credit score, making it difficult to secure financing for a house or other large purchases. If you neglect your bills long enough, they can get sent to a collections agency, which can lead to daily phone calls from debt collectors. There’s also a chance that unpaid medical bills can lead to lawsuits.

Rather than pretending they don’t exist, a better choice is to become a student of your medical bills. Study them to make sure the information and figures are accurate. Understand the billing process, payment options, and your rights as a patient. The more you know, the better prepared you’ll be to pay off your medical debt.

Related: How to Get Out of Debt: A Step-by-Step Guide

Options For Paying Off Medical Debt

If you have medical bills piling up and are struggling to make payments, know that you have options beyond mailing a check or making an online payment for the full amount. Consider giving a few of these a try before letting your bills go to collections.

Set up a payment plan

Many medical providers allow you to set up interest-free payment plans for your bills. Terms may vary based on how much you owe. For example, San Antonio’s Baptist Health System offers payment terms up to 36 months for balances over $5,000.

If more than one person in your immediate family has medical debt, you may be able to combine those bills into one payment plan. Be sure to read all of the details when setting up your plan. Some may require a cash down payment or other stipulations.

Make sure you understand all of the terms as well.

Ask for a prompt payment discount

Besides payment plans, many medical providers give discounts to patients for paying quickly or on time. According to Todd Christensen, AFCPE®, and Education Manager at Money Fit, doctors are more than willing to reward swift payment.

“Never be reluctant to ask for a discount for paying upfront in full,” Christensen says, “Offices are happy to offer discounts rather than deal with the hassle of dealing with insurance or billing you over the next year.”

Check the bill or talk directly to the provider for prompt payment opportunities. Some providers reserve these types of discounts for self-pay patients with no insurance coverage. According to 2018 data from the Census Bureau, 27.5 million people in America don’t have medical insurance. If you’re eligible, in some cases, paying your bill promptly can lower the total amount by 20%.[2]

In order to qualify for a discount with or without insurance, there is usually a time frame in which the payment must be made. Make sure you know what that time frame is and that you can adhere to it. If you can’t, you will likely lose your discount.

Explore financial assistance options

Another option is to look into financial assistance programs available through your medical care providers. Many hospital systems and other medical professionals have programs designed to help patients struggling to pay medical bills.

There are also state and federal programs that offer free or reduced-cost health care if you qualify. Eligibility requirements vary but can include your place of residency, income, expenses, and other financial factors. The Cleveland Clinic, one of the largest non-profit hospital systems in the country, offers three categories of financial assistance:

  • Income-based
  • Maternity services
  • Catastrophic balance

If you find yourself in a situation where you’re having trouble keeping up with medical bills, call your provider to see what financial assistance programs are available and how to qualify. Medical providers know there are circumstances that make bill repayment difficult. In many instances, financial assistance programs can help.

Related: 25 Programs to Get Free Money from the Government 

Get help from a medical bill advocate

If you’ve exhausted other options or need some extra help, hiring a medical bill advocate is the next logical step. They’ll negotiate with providers on your behalf to get your medical bills lowered.

These advocates are also experts at deciphering medical bills. Your bill may contain errors, or you could be getting overcharged for services provided. An advocate will spot those errors and may be able to get your total bill reduced.

Keep in mind that you will have to pay for the services of a medical billing professional. They may charge an hourly fee or a percentage of the costs they helped recover. Make sure the potential savings you’ll receive is more than an advocate’s fees before hiring someone.

Organizations like Medical Billing Advocates of America and the Alliance of Claims Assistance Professionals can connect you with a reputable medical bill advocate.

Related: Need Help Paying Bills? Here’s What You Can Do to Get Assistance Now

Use credit cards or loans as a last resort

Other options available to pay off medical debt include personal loans and 0% APR credit cards. Only consider these options if you run into a dead-end everywhere else. Personal loans charge interest on your debt, which means you’ll pay more in the long run.

Credit cards with introductory 0% APR help in the short-term but can make it worse if you aren’t able to pay off your balance during the no-interest introductory period. If you don’t pay off your balance or make late payments, you’ll end up paying the regular interest rate and or a higher penalty APR.

Exhaust all other options before you consider using a personal loan or credit card to pay off your medical debt. If you think you’ll have trouble making loan or credit card payments, avoid these options.

What to Do If Your Medical Bills Have Gone to Collections

If you’ve ignored your medical bills because your debt became too much to pay off, your medical bills will likely get sent to a collection agency. While most doctors and hospitals don’t report to credit bureaus, collection agencies do, and that can have a substantial negative impact on your credit score. Here are some things you should do if your medical debt ends up in collections.

Know your rights

Leslie Tayne, Financial Attorney and Founder of Tayne Law Group, P.C., says it’s important to know your rights.

According to Tayne, you typically have 30 days from the receipt of your first collections notice to reach out to the collector and have the debt verified in writing. “By doing so,” she says, “you can see exactly what you owe and the details of the debt, while stopping the collection calls until they return your request.”

Consider using one of the Consumer Financial Protection Bureau’s sample letters when you reach out to the collector.


After you understand your rights, consider negotiating with the collections agency to lower your debt. Here are some steps Tayne says to use when negotiating with a creditor.

Know what you owe. Take time to look over your entire bill to make sure you actually owe what’s asked of you. It’s not uncommon for medical bills to have errors, overcharges, or charges for drugs or procedures that you didn’t receive. Tayne advises consumers to “read the fine print and make sure there aren’t any errors on the bill. Ask if the matter has been submitted to your insurance company and even consider calling the insurance company to see if the bill is even owed.”

Take a realistic look at your financial situation. Be honest with yourself regarding what you owe and what you can pay. Tayne says to ask yourself what you can reasonably afford to contribute to your medical debt each month. “Don’t agree to a number higher than this when speaking to a creditor,” she advises. “You don’t want to put yourself in a financial situation that is worst than the one you are currently facing.”

Call the collector. Now, the real work of negotiating your debt begins. Be prepared to take notes during your call. Write down the date and time of your phone call and the name of the collection agency representative you speak with. Every detail could be significant. Tayne recommends to “let the collector tell you what they are willing to do before you make the first offer if you wish to settle the debt.” If you throw out the first number, you could be giving them an offer for more than they’re willing to settle for.

Having your medical bill debt end up with a collection agency is less than ideal. Do your homework, have a plan, and look for a solution that works for you and the creditor. It may take some work, but it’s worth the time and effort.

Related: 8 Steps to Stop Living Paycheck to Paycheck

how to pay off medical debt

Kevin Payne

Kevin Payne is a freelance writer specializing in credit cards, student loans, personal finance, and travel. He is a regular contributor to Student Loan Planner, FinanceBuzz, and Millennial Money. His work has also been featured on sites like Forbes and Credit Karma.

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