How to Pay Off Medical Debt
If you’re facing medical debt, you’re
not alone. According to a recent study by the Kaiser
Family Foundation, the cost of family medical coverage
in 2019 was $20,576—enough to put people who don’t have adequate healthcare
insurance into medical debt. But even if you have good healthcare insurance, getting
into medical debt could almost be unavoidable if you or a family member
requires ongoing treatment for a medical condition or injuries from an
Fortunately, there are ways you can
pay off medical debt and get through this financial roadblock in your life.
Keep reading to learn what they are.
Are Your Options for Paying Off Medical Debt?
Medical Bill Advocates
Income-Driven Hardship Plan
Medical Credit Cards
A payment plan that breaks your bills into multiple equal
payments over several months until you’ve paid off the total.
A medical advocate negotiates your medical bills by looking for
errors or overcharges.
A payment plan with low monthly payments that you may qualify
for if you have low income and high medical bills.
You or a company you hire negotiates with your medical provider
to reduce the total amount you owe.
A credit card designed to provide funds for medical procedures
that are to be paid back over time.
Your medical bills may be forgiven if you have a hardship such
as a disability that prevents you from working.
A legal process where your assets are closely examined and used
to pay off debts or a debt repayment plan is designed. Chapter 7 and Chapter
13 are the two types of bankruptcies.
Zero-interest payment plans are available
Fixed monthly payments
Can help you understand your medical bills and reduce them
A way to avoid bankruptcy
Manageable monthly payments for your income level
Providers may reduce your debt
May significantly reduce your total medical debt
One, low deposit every month
May be interest-free if you qualify
Accepted by most medical providers
Providers may forgive your medical debt completely
Stops collection activity
The opportunity to discharge or wipe out your medical debt
A short 3 to 6 month process (Chapter 7)
Many payment plans come with interest and fees
Could end up paying a lot more interest over the term of your
Fees are involved
Cost may outweigh savings
May have to apply for Medicaid to become eligible
Not offered by all providers
Collection activity may increase
Negative impact on your credit
Fees are involved
May not qualify if you have poor credit
Interest rates can be high, especially after an introductory
Must have a hardship such as a disability to qualify
Will need to show proof that you have no means to pay for your
You may lose some of your assets (Chapter 7)
Long-term, negative effect on your credit score
Must meet strict criteria to qualify (Chapter 7)
Medical Payment Plans
Medical payment plans allow you to
pay off your medical bills over time through fixed, monthly payments. They may
be a good option if you don’t have the cash up front to pay for your bills or
feel more comfortable paying for them in monthly installments. Fortunately,
doctors, dentists, and many other medical providers often offer payment plans
to their patients.
If you believe this is a good route
for you, make sure you find out whether there will be any interest charges
and/or fees. You may be able to qualify for a zero-interest payment plan and
avoid paying interest.
Medical Bill Advocates
Medical bill advocates are
essentially medical billing experts who can negotiate medical bills on your
behalf. Since they are well-versed in reading healthcare bills and are familiar
with the typical costs for various procedures, they can catch errors or
overcharges and may be able to reduce the amount of medical debt you owe.
Some medical bill advocates charge
hourly fees to evaluate one bill, while others charge a percentage of the costs
they’re able to recover for you once they have successfully negotiated a bill
for you. Before working with a medical bill advocate, ensure their fees would
be outweighed by how much they’ll be able to save you.
A medical bill advocate may make
sense if you have an overwhelming amount of medical debt or believe there are
errors on your bills. To make sure you find a reputable one, ask your medical
provider for recommendations or contact the Claims Assistance Professionals and
Income-Driven Hardship Plans
Income-driven hardship plans are similar to typical medical
payment plans but they spread out smaller monthly payments over time. If you
are a low-income patient with Medicaid, you may be eligible for an
income-driven hardship plan if your provider offers it.
With an income-driven hardship plan, you may even be able to get
your medical debt reduced by your provider. Therefore, if you qualify for this
option, it’s a good idea to move forward with it as soon as you receive your
settlement involves negotiating with your creditors to settle for less than
the outstanding balance of your medical debt. While you can do this on your
own, you may feel more comfortable trusting a professional debt settlement
company like Freedom Debt Relief to settle medical debt on your behalf.
Here’s how a debt settlement program
works: You make a monthly deposit into a special account that you control.
After you have enough money in the account, the debt settlement company will
reach out to your creditors to negotiate a debt reduction. If and when your
debt is settled, the debt settlement company will collect its fee, which is
usually 15%-25% of your enrolled debt and was already included in your monthly
If you don’t think you’ll be able to
make monthly payments through a medical payment plan and like the idea of
potentially being able to settle your debt for less in as little as 24 to 48
months, debt settlement may be a wise choice.
Medical Credit Cards
You may want to consider medical
credit cards if your provider doesn’t accept medical payment plans and you’re
confident you can pay off your debt in a fairly short time frame. Medical
credit cards are usually designed for specific medical procedures and often
offer an interest-free period that ranges from six to 12 months.
If you’re unable to pay off your
medical debt during the interest-period, you may face a high interest rate and
be forced to pay substantially more for your medical bills. For this reason,
you should do the math and figure out if the interest-free period is enough
time for you to get rid of your debt.
Medical bill forgiveness may be an
option for you if you have a hardship like a disability that prevents you from
working and paying your medical debt. You may be able to petition your provider
so you can get your debt completely forgiven by calling them up, explaining why
you can’t pay them back, and asking them to forgive your debt based on your
Keep in mind that if you opt for
medical bill forgiveness, you’ll have to show your provider proof that you are
unable to pay your bills. Tax returns and written documents will likely be
necessary to do so.
If you’ve exhausted all other
options, the legal process of bankruptcy may be
a viable way for you to pay off medical debt. Chapter 7 bankruptcy may be a
wise move if you have little to no disposable income (money left over after
you’ve paid your taxes and necessary expenses). During Chapter 7 bankruptcy,
most of your possessions will be sold so that your medical debt and other debts
can be repaid.
Chapter 13 bankruptcy may be an
option if you do not qualify for Chapter 7 because you have sufficient income.
This form of bankruptcy can give you the chance to make one, consolidated
payment toward your debts via a repayment plan that spans anywhere from three
to five years.
While medical debt can be
overwhelming, it is possible to pay it off. Take the time to consider all of
the options available to you to determine which one is ideal for your budget
and lifestyle needs.
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