How to mitigate, manage, and pay down medical debt

Ways to manage your medical debt

There are hundreds of thousands of reasons that a person might need to seek medical care, and the accompanying bills can add up quickly, especially if you’re undergoing a complicated procedure, working with a specialist, or have had a lengthy hospital stay.

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While it’s important to pay off your debts, medical debt can often feel insurmountable. If you’ve been aggressively saving and have a robust emergency savings fund, you may be in decent financial shape. Otherwise, there are a handful of ways to mitigate your hospital debt.

1. Review the bill

Medical billing errors are common. Additionally, medical invoices can be lengthy, which makes it easy to gloss over an error like a duplicate charge or a service you never received. Make sure that you’re going over your itemized bill with an eagle eye and asking lots of questions about each line item you don’t immediately understand. Many major hospitals have financial counselors who can explain the charges and what your insurance will and will not cover.

If your medical situation involved an out-of-network provider or a specialty service like an ambulance, you may be billed separately for those. These kinds of bills can feel especially high because they’re not covered by your insurance. Thankfully, a newer law makes it illegal for providers to bill out-of-network patients at a different rate than in-network patients, which should eliminate some of these surprise bills.

Remember that you are your own greatest advocate. Ask questions about all your medical procedures and ask for itemized bills to make sure you’re not being overcharged.

2. Negotiate

There’s no harm in asking for a discount, especially if you can prove that paying the bill in full would be impossible or hugely detrimental to your financial situation. If your bill goes to collections, it can negatively affect your credit score, but it also gives you some leverage. Bill collectors buy debts for pennies on the dollar, which gives you the opportunity to pay less than what is owed because these collectors would rather receive some money than no money.

Another option is to hire a medical bill advocate. There are fees involved, but these individuals are experts who understand common healthcare costs and how to read medical bills. As with all things, make sure you do your research before you hand out your personal information.

3. Set up a payment plan

The end goal of most hospitals and medical providers, other than providing care, is to get paid. With that in mind, many are willing to work out a no- or low-interest payment plan for any outstanding bills. If you can’t afford to pay off a bill in one go, this is one of the most common ways to pay down medical debt. Generally, the bill is broken down into multiple equal payments over a span of time until the debt is cleared. Before agreeing to any terms, make sure it works with your budget.

If you qualify, you may be eligible for an income-driven hardship plan. This is a different type of payment plan that is typically offered by nonprofit hospitals as a form of charity care. In some cases, the debt is significantly reduced or forgiven entirely. However, you may have to apply for Medicaid before you can be considered eligible for this kind of debt forgiveness.

You may be tempted to leap at the prospect of a quick fix for your mounting medical debt, like opening a credit card or taking out a loan, but these options can have more pitfalls than promise and can wreak havoc on your credit score. One you’ve confirmed that your bill is correct (or made necessary adjustments) and negotiated a payment plan, the best thing you can do is budget appropriately and make consistent, monthly payments until the debt is paid.