5 Tips for Dealing with Unpaid Medical Debt

Access to healthcare is incredibly important — it seems nearly everyone has experienced at least one medical issue requiring attention from professionals. If you’ve ever visited an emergency room, undergone a medical procedure or paid for medication, you know how pricey healthcare can be. Everyone, even health insurance policyholders, can potentially end up facing hundreds or thousands of dollars in medical expenses.

In fact, research has shown two-thirds of Americans cite medical issues — either the high outright cost of care or the time out of work — as a reason for filing bankruptcy.

Are you one of the many Americans currently facing down unpaid medical debt? Here are five tips for dealing with it.

Inquire About Financial Assistance & Payment Plans

You’ve just received a hospital bill for a much higher amount than you anticipated — it turns out your insurance only covered a portion of your visit. Your first order of business should be calling the hospital to inquire about both financial assistance programs and payment plan options.

According to U.S. News & World Report, federal law requires non-profit hospitals to provide financial assistance to patients who qualify. Many for-profit hospitals have these types of programs, too. But you’ll only know if you ask. Expect to show proof of income when you do.

It’s also worthwhile to ask about payment plan options, particularly if you have no way to pay off your outstanding balance in one lump sum.

Know the Costs of Medical Procedures

Look over each bill carefully, evaluating the accuracy and the pricing of each item. Medical establishments sometimes charge patients more for procedures than they charge insurance companies, so it pays to ask if you can pay the insurance rate instead. Many sources are available to help you determine accurate prices for various medical services.

Consider Consolidation or Settlement

If you’re struggling with thousands of dollars in medical bills, you may find debt consolidation or debt settlement to be viable solutions. People who have enrolled in debt settlement often cite medical bills as a reason for doing so, as these Freedom Debt Relief reviews demonstrate.

Consolidating your debt means taking out a personal loan to cover other debts, like unpaid medical bills. The key to effective consolidation is securing a loan at a lower interest rate than your other debts; otherwise you’ll end up paying more over the long term than you would by facing your other debts directly.

Settling your unsecured debts, like medical bills and credit card balances, hinges on negotiating with creditors in the hopes they’ll accept a lesser amount. Keep in mind though; you’ll be responsible for paying in a timely manner if they do. Remember also, consolidation lowers interest rates and fees, while settlement often lowers the percentage of your balance owed.

Avoid Putting Medical Bills on a Credit Card

It may be tempting to put your medical bills on a credit card and tell yourself you’ll pay them off later. However, credit card interest rates tend to be higher than medical bills, making this move counterproductive. As NerdWallet advises, “You might as well make monthly payments to the hospital; it will be much cheaper.”

Remember: You Have Time to Address Medical Debt

Although unpaid medical debt can negatively affect your credit score, it’s weighted less than other liabilities and often takes longer to show up. According to Consumer Reports, new regulations require credit reporting agencies to wait 180 days before applying unpaid medical bills to credit reports. Further, doctors and hospitals usually turn unpaid bills over to collections rather than immediately reporting them to credit bureaus.

In other words, you have time to call the billing department and consider your options carefully before rushing into a snap decision like paying with a credit card.

Unpaid medical debt can be very tricky, but there are steps you can take to alleviate the burden.