Need help paying medical bills? Consider a payment plan, using credit, or negotiating costs.
Recent Update on Medical Debt and Credit Reports
In January, the Consumer Financial Protection Bureau (CFPB) finalized a rule that would remove an estimated $49 billion in unpaid medical bills from the credit reports of roughly 15 million Americans. The rule would also prevent medical bills from appearing on credit reports in the future and prohibit lenders from considering medical debt when making credit decisions.
However, the rule faced several lawsuits claiming the CFPB exceeded its authority. In July, U.S. District Court Judge Sean Jordan ruled that the medical debt rule did, in fact, go beyond the CFPB’s powers, stating that it conflicted with the Fair Credit Reporting Act. As a result, medical debt will continue to appear on credit reports, although the CFPB continues to encourage lenders to consider other financial data in credit assessments.
Understanding Medical Debt
Having medical debt isn’t uncommon — according to the CFPB, almost one in five U.S. households have overdue medical debt. Unlike loans or credit cards, paying off medical debt often allows for more flexibility and negotiation. You might even be able to reduce the amount you owe.
Before paying, review your medical bill carefully and compare it with your explanation of benefits (if you have insurance). Confirm what you’re actually responsible for, and don’t assume the total is final — you can always attempt to negotiate.
“Tell them you’ll pay what BlueCross or Medicaid would pay,” says Chi Chi Wu, senior attorney at the National Consumer Law Center.
7 Options for Paying Off Medical Debt
1. Set Up a Payment Plan
Many providers — including hospitals, physicians, and dentists — offer no- or low-interest payment plans. This allows you to pay smaller amounts over time without high fees or interest.
Minimum monthly payment: It depends on your total bill and the terms negotiated. Always ask about billing charges or fees before agreeing to a plan.
2. Apply for a Medical Credit Card
Some providers offer medical credit cards, which often feature an interest-free period of six to twelve months. However, if the balance isn’t paid in full by the end of that period, deferred interest can make your debt much more expensive. Missing or late payments can also hurt your credit score.
3. Consider Other Credit Options
If a medical credit card isn’t the right fit, explore other types of credit. Compare interest rates, fees, and repayment terms carefully.
- Personal loans: These can help consolidate multiple medical bills or pay for large procedures. Loan amounts typically range from $1,000 to $100,000, but interest and fees can add up quickly if payments are missed.
- 0% interest credit cards: If you qualify, a zero-interest promotional card can give you time to pay off your balance interest-free. Make sure to pay it off before the promotional period ends, and consider dedicating the card solely to medical expenses for easier record keeping.
4. Negotiate Costs on Your Own
If your medical bills are already in collections, you may still be able to negotiate a lower payoff amount. Debt collectors often purchase medical debt for pennies on the dollar, which gives you room to negotiate.
Review your bills closely for errors or overcharges, and follow up persistently with customer service. If possible, negotiate a lump-sum payment or a reasonable installment plan — whichever you can afford.
5. Hire a Medical Bill Advocate
If you’re overwhelmed by a large number of bills or a complex hospital stay, consider hiring a medical bill advocate. These professionals understand medical billing codes and can identify overcharges or errors to help reduce your total balance.
Important: Choose a reputable advocate. Avoid individuals or companies that demand upfront payment without clear terms. Verify credentials and compare fees to ensure that savings will outweigh the advocate’s costs.
6. See If You Qualify for an Income-Driven Hardship Plan
Low-income patients with large medical bills may qualify for hardship or income-based repayment plans. These programs can reduce or even forgive debt entirely. Nonprofit hospitals are required to offer some form of financial assistance or charity care, though you may need to apply for Medicaid first to qualify.
7. Ask an Organization for Assistance
Several public programs and private organizations help patients manage or pay medical bills. These groups can offer grants, payment assistance, or resources for prescription costs.
Start by checking with your provider or a trusted medical bill advocate for recommendations. You can also explore the following resources:
- USA.gov — Information on medical and health care benefits.
- State Health Insurance Assistance Program (SHIP) — Guidance for Medicare-related questions.
- Healthwell Foundation, Patient Access Network (PAN) Foundation, and UnitedHealthcare Children’s Foundation — Financial help for expenses not covered by insurance.
- NeedyMeds — Programs for prescription assistance and drug discounts.
Additional Considerations When Managing Medical Bills
Ignoring medical debt or rushing into the wrong payment plan can damage your credit and increase costs over time. Take a proactive approach to manage your bills responsibly and verify that all debts are valid.
- Verify debt validity: Make sure the bill is legitimate and belongs to you.
- Request debt verification: Collectors must provide the creditor’s name, the amount owed, and instructions for disputing the debt.
- Use CFPB templates: The CFPB provides debt verification letters and a complaint process if you encounter problems disputing charges.
- Consider debt relief or bankruptcy: If medical costs are threatening essentials like housing or food, professional debt relief or bankruptcy may be worth exploring.
Fact Checked by Tiffany Curtis · Edited by Pamela de la Fuente · Co-written by Lauren Schwahn