How To Get Out of Medical Debt: Smart Ways To Pay It Off

Medical debt can feel overwhelming, but there are several ways to lower the balance, set up affordable payments or even get part of the bill forgiven. If you owe a hospital, doctor or provider for medical treatment, services or procedures, start by reviewing the bill, asking about financial assistance and exploring repayment options.

Here are some strategies that can help you get out of medical debt.

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Key Takeaways

• Always check your medical bill for errors before paying a cent. Request an itemized bill and your records, then compare them against your insurer's explanation of benefits. Duplicate charges and upcoding are common.

• Nonprofit hospitals must keep a written financial assistance policy. Under IRS rules, tax-exempt hospitals offer charity care to patients who meet income limits — ask the billing department and apply before you pay.

• You usually have the most leverage in the first 90 days. Before an account heads to collections, ask about self-pay, Medicaid or hardship rates and try to set up a payment plan in writing.

• Medical collections under $500 are currently excluded from credit reports. The three credit bureaus also wait 12 months before larger unpaid balances can appear, though this is bureau policy, not federal law.

• Knowing how to get out of medical debt starts with assistance, not loans. Charity care, retroactive Medicaid and direct negotiation come first — treat a medical credit card or personal loan as a later option.

Summary generated by AI, verified by MoneyLion editors

How Do You Check a Medical Bill for Errors?

Before you decide to pay your medical bill, it’s a good idea to check if it’s accurate. Here's how:

1. Request an itemized bill: Get a line-by-line bill of all your charges. Double-check to see if these services were provided.

2. Get a copy of your medical records: You want the bill to match the procedures, consultations and treatments you actually received. 

3. Contact your insurance: Your insurer should send you an explanation of benefits. 

4. Try to find out what the billing codes mean: The billing codes should match the services you received. 

5. Dispute errors in writing: If there are errors, you should dispute them in writing. 

Common Errors

• Duplicate charges: You were billed more than once for the same service, procedure, medication or supply.

• Upcoding: You’re billed for the more expensive code rather than the less expensive service you received.

• Wrong patient information: Insurance information is incorrect as well as the wrong date of birth and other identification errors.

• Services not rendered: You got billed for services not received.

• Wrong diagnosis: You got a bill for the incorrect diagnosis. 

How To Negotiate With Your Medical Provider 

There's a way to leverage yourself into a better position with your medical bills if you act proactively. Here are some tips: 

• Call the hospital prior to any non-emergency care needs: There may be a prepay or self-pay rate you can negotiate prior to the service. 

• Request an itemized bill from the provider or hospital: During this time period, you can try to negotiate a payment plan and will have more leverage since the account hasn’t been forwarded to collections.

• Ask for the Medicaid rate: If you’re low-income or underinsured, you could request this rate. 

• Negotiate if you’ve experienced a hardship on your income: A job loss or a major life change could help you get a lower rate. You’ll have to provide proof of income. 

• Negotiate even if your account is in collections: Collection agencies want to collect some money over no money. See if they’re agreeable to a settlement. 

• Communicate with the provider or hospital within the first 90 days: It’s the first 90 days when you have the most bargaining power to negotiate your bill.

Financial Assistance and Forgiveness Programs 

Here's a look at some financial assistance and forgiveness programs that you may qualify for:

What Happens If Your Bill Goes to Collections

Is your medical debt already in collections? Use these strategies to lessen the impact on your financial picture. 

• Request debt validation: Within 30 days of the contact from the collection agency, request written proof that the debt is valid and that they have the right to collect it. 

• Get an itemized bill from your original provider: Medical errors are common, and you need a bill specifying each charge to make sure you received that service. 

• Contact your insurance company: Sometimes insurance will cover a portion of the bill, especially if it was erroneously sent to you before it was sent to your insurance provider. 

• Reach out to charity organizations: Contact your hospital to see if you can receive some assistance with the bill if you’re experiencing hardship. 

• Try to offer a lump-sum settlement: Collection agencies would rather receive something instead of nothing, so see if they'll accept a settlement for the debt. 

• Pull and check your credit report: You want to make sure there are no errors on your credit report. 

• Know your state’s statute of limitations: Every state has a statute of limitations on the time limits that a collector can sue for the debt.

Credit Reporting Rules Specific to Medical Debt

• Small balances are currently left off your reports. The three major credit bureaus voluntarily exclude unpaid medical collections under $500, so these shouldn't appear on your credit report.

• Larger balances get a 12-month grace period. Unpaid medical debt over $500 can be reported only after it's been in collections for at least 12 months under current bureau policy.

What Are the Best Ways To Pay Off Medical Debt?

Consider these options if you still have some medical debt:  

What Not To Do When You're Dealing With Medical Debt 

Knowing what to do is just as important as knowing what not to do when it comes to medical debt. Here are some things you don’t want to do: 

1. Going silent: You want to keep lines of communication open with the hospital or provider. Ignoring the bill will only hurt your finances. 

2. Paying before checking your bill: Hospitals and providers do make errors. Don’t pay a bill without checking the specific services and amounts charged. 

3. Assuming you don’t qualify for financial assistance: Always check. Under IRS rules, nonprofit hospitals must keep a written financial assistance policy, though income limits and award amounts vary by hospital.

4. Paying before getting the settlement in writing: Don’t take a verbal confirmation of a conversation as an agreement. Get the terms in writing before starting to make payments. 

5. Taking a personal loan out before looking at other options: Charity assistance, talking to a nonprofit credit counselor, direct negotiations with the hospital and retroactive Medicaid assistance are all viable approaches. 

6. Paying the full amount when you're uninsured: Often the uninsured are in the best position to negotiate.

Getting Out of Medical Debt: Your Next Steps 

• Make sure you communicate with your healthcare provider or hospital regarding your debt. Ignoring the bill will not make it go away. 

• Always check your bill for errors. 

• Before paying your bill, reach out to see if there’s any assistance available — charity assistance, retroactive Medicaid benefits, a self-pay rate or other options. 

• Any agreement you reach, make sure you get it in writing. 

FAQs

Can medical debt be forgiven entirely?

Full federal forgiveness doesn’t exist. However, some states will forgive debt entirely. Nonprofit charities or retroactive Medicaid assistance may wipe out debt entirely.

Does medical debt hurt your credit score?

If your medical debt is less than $500, creditors can’t report it to the credit bureaus. Unpaid medical debt over $500 can be reported if it's been in collections for at least a year, but is treated differently based on the scoring model used. Vantage doesn’t consider medical debt as part of the score, but old FICO models do weight medical debt as a factor.

What's the difference between a payment plan and debt consolidation for medical bills?

A payment plan is when the consumer directly deals with the hospital to establish a payment agreement. Debt consolidation is a personal loan where multiple debts — medical bills, credit card balances, etc. — are rolled into one single loan.

Can a hospital send me to collections even if I'm trying to pay?

Yes, a hospital can send your account to collections, but most won’t because you’re actively making payments under a written agreement.

What if I can't afford even a payment plan?

Ask for assistance, find out if you’re eligible for Medicaid, contact Undue Medical Debt to see if your debt is eligible for cancellation or contact a nonprofit counseling company.

 Is a medical credit card a good idea?

Consider a medical credit card as a last resort after you’ve tried requesting charity assistance, a payment plan or negotiating the debt. Medical credit cards have high interest rates if you don’t pay the credit card off during the requisite period.

Key Terms

• Itemized bill: A line-by-line statement listing every charge, code and service, used to spot duplicate charges, upcoding or services you never received.

• Charity care: A hospital's financial assistance program that reduces or eliminates bills for patients who meet income thresholds. Nonprofit hospitals are required to maintain a written policy, but eligibility varies by hospital.

• Medicaid retroactive coverage: Coverage that may pay for care received in the months before you applied, if you qualified at the time. The lookback window varies by state.

• Debt validation: Your right to request written proof that a debt is valid and that the collector can legally collect it, generally within 30 days of first contact.

• Lump-sum settlement: A one-time payment a collector or provider accepts to resolve a balance, often for less than the full amount. Get the terms in writing before paying.

• Medical credit card: A card for healthcare costs that often carries deferred-interest promotions. If the balance isn't paid off in the promo window, interest can be charged retroactively, so it carries real risk.

• VantageScore: A credit scoring model that, in versions 3.0 and 4.0, excludes medical collections from the score entirely, unlike older FICO models that still factor them in.

• Statute of limitations: The state-set time limit during which a collector can sue you over an unpaid debt. It varies by state and debt type.

Summary generated by AI, verified by MoneyLion editors

Sources

• Health Resources & Services Administration. "Hill-Burton Free and Reduced-Cost Health Care."

• National Library of Medicine. "Medical debt and collections in the United States."

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