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

There are three main ways to get out of medical debt: review your bill for errors, negotiate with your provider or hospital to establish a payment plan, and seek financial assistance. You may need to use a combination of these approaches to manage your debt.

To give yourself more time to explore your options, contact your provider or hospital within the first 90 days to ask questions and discuss possible solutions.

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

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Your Action Timeline: When To Act

Addressing your medical bill early may help you avoid collections and give you more time to explore payment options. Here's what you can do at each stage.

Check Your Medical Bill for Errors

Here are a few common errors to look for in your bill: 

• Wrong patient information 

• Duplicate charges 

• Charges for services you never received  

• Upcoding 

• Wrong diagnosis  

How To Dispute Medical 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. Compare it to the insurance’s EOB: Your insurer should send you an explanation of benefits.  

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

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

Negotiate With Your Medical Provider

Contacting your provider or hospital early may give you more options for negotiating your bill. If possible, reach out within the first 90 days to ask about discounts, payment plans or financial assistance.

If You Haven’t Paid Yet

• Call the hospital before receiving any non-emergency care: 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.  

If Your Bill Is 30 to 90 Days Overdue

• 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. 

If Your Account Is in Collections

• 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.  

What To Say

Here are a few examples of language you can use when talking to hospitals or medical providers:

• For a self-pay rate: Say “I can pay in cash. Is there a discount if I pay in full?” 

• For a hardship rate: Say “I recently lost my job and can’t afford payments. Can you offer a hardship discount?” 

• For a payment plan: Say "I'd like to pay my bill but can't afford it in full. Can I get a payment plan?"

• For collections: Say "I'm able to pay a lump sum. Can you accept this (insert amount) as a settlement?"

Explore Financial Assistance First

Before committing to a payment plan or taking on additional debt, check whether you qualify for financial assistance. Several programs may help reduce or eliminate your medical bills.

Pay Off or Settle Your Debt

If you can't pay your medical bill in full, a payment plan or lump-sum settlement may help you manage the balance. The right option depends on how much you owe, what you can afford and whether your account is already in collections.

Choose a Payment Plan If

• You’re unable to pay the bill all at once, but can afford payments over a period of time.

• You’re able to secure a payment plan without having to pay interest.

• You want to prevent your account from going into collections.

Choose a Lump-Sum Settlement If 

• You have enough cash or savings to pay a large portion of the bill at once.

• Your account is past due or already in collections.

• You’d like to pay off the debt sooner rather than later.

Choose a Medical Credit Card If 

• You’ve looked into payment plans and lump-sum settlements.

• You can pay off the full balance before the promotional period ends.

Choose a Personal Loan If  

• You're considering medical debt consolidation to combine multiple bills into one monthly payment.

• You qualify for an affordable interest rate.

• You don’t have any other available options.

When To Avoid Credit Cards or Personal Loans 

Once you pay using a credit card or personal loan, it’s no longer considered medical debt. You may pay high interest and lose protections of financial assistance and discounts.  

If you're considering borrowing but have a low credit score, compare medical loans for bad credit carefully, including their interest rates, fees and repayment terms.

What To Do if Debt Is Already in Collections

Use these strategies to lessen the impact on your financial picture if your debt is already in collections.   

1. Request debt validation: Review the validation information provided by the collection agency. If you believe the debt is incorrect, dispute it in writing within 30 days of receiving the validation notice. The collector generally must pause collection efforts until it responds with verification.

2. Verify accuracy against original bills and insurance: Medical errors are common, and you need a bill specifying each charge to make sure you received that service.  

3. Negotiate settlement or payment plan: Collection agencies would rather receive something instead of nothing, so see if they'll accept a settlement or a payment plan for the debt.   

Credit Protections You Should Know

The three major credit bureaus have voluntary policies that limit how medical collections appear on credit reports. These protections aren't universal federal requirements, and some states have additional rules.

• Medical collections with an original reported balance under $500 are excluded from credit reports by the three major bureaus.

• Unpaid medical collections of $500 or more generally must be at least 12 months old before they can appear on credit reports.

• Paid medical collection accounts are removed from credit reports under the bureaus' policies.

• Some states have additional medical debt reporting protections, including restrictions on reporting certain medical debts.

You can also learn more about the Medical Debt Forgiveness Act and how medical debt relief proposals and protections may affect consumers.

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.  

• Check your bill for errors before you pay.

• 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.  

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

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: Information a debt collector must provide about a debt, including the amount owed and creditor. You generally have 30 days after receiving the validation notice to dispute the debt in writing and request verification.

• Debt consolidation: Combining multiple debts into one new loan or balance transfer, so you have a single monthly payment instead of several.

• 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.

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

• Consumer Financial Protection Bureau: Have medical debt? Anything already paid or under $500 should no longer be on your credit report

Photo credit: merznatalia / iStock

Parts of this article were created with AI assistance. MoneyLion editors reviewed, fact-checked and edited the final version and are responsible for its accuracy.