5 Steps to Handling Medical Bills

Medical bills can be a prescription for financial disaster. More than half of Americans have had medical debt sent to collections. And about half a million Americans have been forced to file bankruptcy because of medical bills. Dealing with a medical problem and debt is not just a financial problem, but a stressful one as well.

As it has with just about everything, the COVID-19 pandemic has made the medical debt situation worse. Experts say that medical debt has risen over 3% since the start of the pandemic and is up 7% from last year. Daunting medical costs are not limited to the uninsured. Even company-sponsored health plans can include hefty deductibles, which means a trip to the doctor or the emergency room can take a healthy bite out of your budget.  

It can be tempting to toss the bills and statements into the bottom of a drawer. But that can only worsen the problem, with interest added on to what you owe and future medical visits adding to your debt. 

Instead, take a thorough look over the bills. Are the expenses accurate? Billing errors do happen.  And watch the clock. The three main credit bureaus give you 180 days before your credit score is impacted by medical debt sent to collections.

Once you’re clear on what you owe, here are some steps to take to help resolve your debt.

Negotiate with your provider. Some providers may be willing to reduce charges, even by a small amount. Every little bit can help.

Set up a payment plan. Many major medical systems have a financial office and will work directly with you to set up payment plans. Some will even have the monthly amount you agree upon automatically deducted from your checking or savings account. Don’t be afraid to ask for help and to request even a small monthly payment. This shows you are willing to work with them and good faith goes a long way.

Consider a patient advocate who can help you cut through the red tape and understand your options more clearly. Local social service agencies can often point you to a patient advocate to help you navigate the financial side of illness.

Take out a loan. There are various options to consider. Personal loans will allow you to pay your debts off up front, then pay the loan back in increments. A personal line of credit provides a certain amount of money you can draw from when and if you need it. Home equity loans are an option if your house has accrued enough value, but you risk losing your home if you don’t repay it. Borrowing from a friend and relative can be tricky, but might be a last-ditch option. Just make sure your repayment terms are set in writing.

Look for financial aid.  The CARES Act may be more closely associated with stimulus payments and unemployment extensions but the legislation offers all forms of assistance to people who are struggling with costs, including medical bills. Visit the USA.gov website for more information.

You don’t have to let medical debt crush your future. Take action on your bills as soon as you’re able to, be frank about what you can afford to pay on them, and be prepared to negotiate and accept any assistance that’s offered.


Download our free Financial First Aid eGuide. It’ll walk you through the best ways to manage your money during uncertain times. We’ll show you how to take inventory and review all your expenses, assess your debts, prioritize bills and communicate with creditors, and so much more!

Financial First Aid eGuide

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