Medical Debt Relief: How to Get Help

It’s no secret that health care in the U.S. is expensive. According to one study, around 46 million Americans (18% of the population) can’t afford to pay their medical bills. If you’re one of them, don’t panic. There are options out there – from nonprofit organizations to more affordable health insurance – that can help.

You’re Not Alone: Medical Debt is More Common Than You Think

According to a 2019 report, around 56% of American adults (137.1 million) face financial hardship due to medical bills. The following groups of people were most impacted by their medical debt:

• Low-income households
• Individuals without healthcare coverage
• People with less education
• Uninsured young adults
• Older adults with Medicare but no other public or private health insurance

However, even those with a higher income or health care coverage aren’t immune to medical debt. There are a few reasons for this, including:

• Unexpected diagnosis of a major health problem (ex. cancer) and costly treatment
• Sky-high deductibles and out-of-network costs
• Paying medical bills off with high-interest credit cards
• Vague terms in what the health plan actually covers

From 2018 to 2019, national health care spending grew by over 4%. In that same year, the average adult owed $11,582 in medical bills. Even now, the cost of health care continues to rise, and health insurance companies continue to require higher out-of-pocket costs. 

What Happens if I Don’t Pay my Medical Bills?

Defaulting on any type of debt can have serious consequences.

If you don’t pay your medical bills, your health care provider will eventually send the unpaid bills to a collections agency. Some providers will do this once the bill is 30 days late. Others will wait for 60, 90, or even 180 days.

Many people believe that paying part of their medical bill will be enough to keep the bill out of collections. But medical bills don’t typically have minimum payments. So, even if you’re making partial payments, a healthcare provider could still turn the unpaid bill over to collections.

Once a medical bill is 180+ days late — or as of July 2022, one year late — the three major credit bureaus will list it on your credit report. When this happens, it will damage your credit score.

A medical bill in collections won’t impact your credit as much as other types of debt in collections. But it can still make it harder for you to qualify for different types of financing like a mortgage.

How can I get Help with Medical Bills?

If you have outstanding medical debt, here’s what you can do right now to manage it.

Review the Bill

It’s easy to think that insurance providers are infallible, or that they won’t make any mistakes. But the truth is, most medical bills have at least one error. The amount listed on the bill may be higher than what it should be. Or the bill may be a duplicate. In some cases, you could be charged for something your insurance is supposed to cover.

Whenever you receive a medical bill, carefully review it for any errors. If there are any, or if you’re not sure, cross-reference the bill with your insurance. If you don’t receive a bill after treatment at all, contact your insurance provider to ask what’s going on.

Are There Incorrect Charges?

The terms of health insurance are often vague or hard to fully understand. But if something doesn’t look right, call your insurer. Check and double-check everything about the charges before you pay for something you shouldn’t have. While you’re on the phone, ask your healthcare provider for an itemized bill so you can check everything yourself.

You’d be surprised at how extreme the errors on a medical bill can be. One guy in Texas went to a free-standing ER for a COVID test. He was charged over $50,000. After disputing the charges, his insurance company ended up covering the bill.

Even if you can afford to pay your medical bill, if it seems absurdly high, ask questions before paying.

Do you Qualify for Payment Assistance Programs?

There are a lot of payment assistance programs out there. Programs like CHIP and Medicaid are specifically there to help low-income patients lower the cost of healthcare. Depending on your situation, you may be eligible for a program like this. Check with benefits.gov for any programs in your area you may qualify for.

Try to Negotiate

You may be able to negotiate with the hospital or medical facility about the cost of health care. But, in most cases, you will need to do this before seeking treatment. Reach out to the medical facility’s billing department for an estimate of what you’ll owe. Then, contact your insurance provider to see what they’ll cover.

Once you’ve figured out the difference, call the billing department again. Be honest about what you can afford and see if there are ways to reduce costs. Some ways to lower costs include skipping a non-essential procedure or getting a generic prescription.

If that doesn’t work, look around for other insurance providers or If that doesn’t work, look around for low-cost options like urgent care centers and clinics. Some may charge less for the treatment or medication you need.

Try to Set Up a Payment Plan

Whether you qualify for a payment assistance program or not, it doesn’t hurt to try to set up a payment plan. Many healthcare providers offer this option to those who ask. Payment plans for medical services are often interest-free and more affordable than paying all at once.

The Consumer Financial Protection Bureau (CFPB) recommends getting the plan in writing to prevent future issues. Make sure your healthcare provider includes the following details:

• No interest will accrue
• Debt will not be sent over to a collection agency if you make payments on time
• You won’t have to make the full payment if you are late or miss a payment

Hire a Patient Advocate

A patient advocate, or a medical billing advocate, can help if you’re struggling with a lot of medical debt. These patient advocates will look over your medical bills for any errors or other issues. Their familiar with any patient assistance programs and charity care options that might be available. They do charge by the hour – typically between $100 and $165 – so be prepared for that. If they manage to lower your bill, they may also charge between 20% and 30% of the amount saved.

If you’re considering this route, go to the Alliance of Claims Assistance Professionals to find an advocate for you.

Organizations that can Help

There are several great organizations out there that help underinsured and uninsured people manage their medical debt. Here are three of the most prominent ones.

• HealthWell Foundation. HealthWell works with underinsured consumers to help make their medical needs more affordable. The non-profit organization helps cover certain types of procedures, treatments, and prescription medications. It offers payment plans, partial payments, and grants to qualifying individuals. Contact them here to find out if you qualify and for what type of aid.
• Patient Access Network Foundation. The PAN Foundation helps uninsured and underinsured patients with their out-of-pocket healthcare costs. You can determine your eligibility for the program on their main page. You’ll need to indicate if you’re a patient, provider, or pharmacy. You’ll also need to indicate your condition and any medications you’re taking to see if you’re eligible. Funding opens sporadically, so join the waitlist or check back periodically if you don’t find what you need.
• Patient Advocate Foundation. This foundation helps people apply for financial aid, manage their co-pays, and more. It also works to connect people with the right resources for their healthcare needs. It even has a scholarship for eligible students (found here).

Average Medical Care Costs

For those who are uninsured or underinsured, here are the average costs of common treatments, procedures, and more. Bear in mind that these estimates don’t factor in prescription drug costs.

For a Doctor Visit

A standard visit to a primary care doctor will cost between $20 and $25 with private health insurance. A trip to a specialist is around twice that amount. This is assuming your healthcare plan comes with a low deductible.

For those without insurance, a doctor’s visit costs between $70 and $250. However, if you need a new prescription or if the visit requires additional testing, expect these numbers to rise.

For an ER Visit

The emergency room (ER) is almost always more expensive than a trip to the hospital. A level 1 triage is considered the most urgent and, therefore, the most expensive. A level 5 triage is the least urgent and will usually cost less. For context, most people go to the ER for a level 3, which costs around $2,200 on average.

Hospital Bill for Inpatient Treatment

Inpatient treatment refers to things like an overnight stay or surgery. It essentially includes anything that requires admission to a hospital for treatment.

The typical cost of an overnight stay at a hospital is just over $13,000 before coverage. Surgeries and other medical procedures or treatments usually come at an extra charge with varying costs.

COVID-19 Hospitalization

While the initial vaccine and booster shots are currently free, COVID-19 hospitalization is another story. The costs do range based on age though. Patients ages 23 to 30 are charged $34,662; those between 51 and 60 years old are charged $45,683.

Typical Surgery Costs

The medical bill for surgery is by far one of the most expensive things more people have to pay. To put things into perspective, surgery may be more expensive than buying a new car. Here are some examples of costs before insurance:

• Heart bypass surgery: Averages out at $75,345
• Gallbladder surgery: Between $10,000 and $20,000
• Appendectomy: $10,000 to $35,000+ depending on the type of operation, provider, and any complications
• Knee replacement: Around $30,249 (inpatient costs) or $19,002 (outpatient costs)
• Hip replacement: Starting at $23,000 and going up to $74,000+
• Hysterectomy: $4,271 to $8,413 for an abdominal or vaginal hysterectomy
• ICD (Implantable Cardioverter-Defibrillator) implantation: Around $36,098 on average (up to $57,347)
• Weight loss surgery: Depends on the type (ex. gastric bypass surgery costs around $23,000)

Other Options for Paying Medical Bills

Here are some other options that can help you pay off your medical bills.

Do you Qualify for Financial Assistance?

Many nonprofit organizations, like the PAN Foundation and the HealthWell Foundation, are there to help with medical expenses. Check around for any local nonprofit organizations that serve your community. Also, check for any income-driven repayment plans.

Apply for a Loan

Loans and credit cards should be considered a last resort, but there are times when they’re necessary. Only go this route if you have high medical bills and can’t set up a payment plan or get financial assistance elsewhere.

Even then, look for a 0%-interest loan or medical credit card. Keep in mind that this 0%-interest period will eventually come to an end. Once it does, the interest may end up being much higher than the medical bill itself. So, make sure you can pay off the entire amount within the interest-free period.

Try to get a loan from someone close to you rather than a bank or other financial institution. Iron out the details with that person – payment amounts, loan length, any interest, etc. – before finalizing the deal. If you do have to go through a bank or credit union, see if you can get loan forgiveness. A medical bill advocate may be able to help with this.

Work With Any Debt Collection Agencies That Contact You

Accounts in collections can severely damage your credit for years to come. If a debt collection agency is contacting you, don’t ignore them. Instead, tell them the situation you’re in. Be as honest and transparent as possible.

Some agencies will be more lenient when they know the specifics. They may be willing to direct you to other resources or help you set up a payment plan. In some cases, you may be able to negotiate a debt settlement to lower how much you owe. Debt settlement may impact your credit score though, so keep this in mind.

In addition, there is one big benefit to repaying that medical debt in collections. Starting in July 2022, all paid medical debt will be erased from Americans’ credit reports, so it won’t weigh your credit score down for seven years. So getting that debt paid now will mean a big boost for your credit score.

Consider Bankruptcy

According to one study, 62.1% of all bankruptcies in the United States are related to medical expenses. Bankruptcy should never be your first option, but it can sometimes be the only one. If it comes to it, reach out to an attorney experienced in bankruptcies. Some attorneys work pro bono or at a reduced cost for those in need.

A recent study showed that medical bills are the largest source of debt in the U.S. To learn more, watch this video:

Health Insurance Options

There are a lot of health insurance options out there. This includes private health care, employer-based coverage, and more. Here’s an overview of the main options.

Private Health Care

As of 2019, 49.6% of Americans use private health insurance. Private organizations and some employers offer private health insurance plans. These plans may be subsidized by the government, but they are not offered by government-run health insurance programs. Some private health insurance plans are not well-regulated and should be used as a supplement to another plan or program.

Employer-Sponsored Health Insurance

Employer-sponsored health insurance is a type of private health insurance. It’s also one of the most common options for most working Americans. This type of insurance is available to eligible employees (usually those who are full-time) and their children. Some employers may also cover their employees’ spouses on the plan.

A High-Deductible Plan

Some insurance plans come with a low monthly premium but a high deductible. These are known as High-Deductible Plans. Every high-deductible plan comes with its own maximum out-of-pocket costs. With this type of insurance, your monthly premium is low, but you’ll owe much more for any medical expenses.

It may be possible to combine a high-deductible plan with an HSA, or health savings account. HSAs are tax-advantaged savings accounts meant specifically to help cover medical costs.

COBRA

The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a policy that helps protect those who’ve recently lost healthcare coverage. This includes employees and their families who were once under a group health policy. It also works with those who may lose access to coverage due to certain circumstances. With COBRA, rather than lose the healthcare policy, you continue to pay premiums and keep access to it. COBRA coverage lasts between 18 and 36 months.

Medicare

Medicare is a health policy controlled by the federal government. It’s available to people who receive Social Security (those ages 65 and up and those with certain disabilities). Medicare helps reduce the cost of general healthcare, but it doesn’t cover everything. Many people have both Medicare and a private health policy.

For more information, check out the official site here.

Medicaid

Around 19% of Americans have Medicaid, making it the second-most popular form of health coverage in the country. Medicaid is a state-provided program available to pregnant women, seniors, people with disabilities, seniors, and low-income individuals. Just over 75 million Americans have Medicaid.

Affordable Care Act Plans

The Affordable Care Act (aka Obamacare) is a healthcare reform law passed in 2010. Its purpose is to make health insurance more affordable and more available to those who need it. It includes subsidies that help reduce the costs of healthcare for households who fall below the federal poverty level.

Details vary based on income level, employment, and state residency. Some states have more coverage than others. Depending on the affordable healthcare care plan you choose, the deductibles can be costly.

CHIP

The Children’s Health Insurance Program (CHIP) offers affordable healthcare to children from low-income families. It helps those who don’t qualify for Medicaid due to their income but who can’t afford private insurance. Again, these are state programs so different states have their own eligibility requirements and coverage.

For more information, check out this page.

Gap Insurance

As it sounds, gap insurance is a short-term program that prevents there from being any gaps in health care coverage. It’s geared towards those who lose coverage due to a layoff or a change in job.

On the plus side, gap insurance is less expensive than COBRA. On the downside, not many health care facilities offer it. Gap insurance also doesn’t cover prescription medications and can come with a fairly high deductible.

Sidecar Health

In recent years, several smaller health care plans have been established. This includes Sidecar Health. Sidecar offers ACA-compliant healthcare for individuals, as well as employer group plans and benefits plans. As a smaller company, Sidecar is not available in all states. It also doesn’t offer the same benefits and coverage in all areas. For more information, check out Sidecar’s homepage.

Telemedicine

Telemedicine has gained popularity as an alternative health insurance option since the start of the COVID-19 pandemic. It’s a way for people to get the medical attention they need without going in person. Due to the nature of telemedicine, it may also be cheaper than in-person visits. Of course, it does have its limitations – for instance, any physical treatments will require an in-person visit.

The Bottom Line

The simple truth is this: Health care in the United States is expensive.

Many people struggle with hefty medical bills, something that can lead to both short-term and long-term financial problems. But it’s never a good idea to ignore any type of debt.

If you have it, pay attention to your insurance so you know what and how much it covers. If you don’t have coverage, or if you’re underinsured, look for other health insurance options. They’re out there, even if they’re hard to find at first.

Remember to review any medical bills you receive for errors. And don’t be afraid to reach out to your healthcare provider or try to negotiate with debt collectors. After all, many people are more understanding when it comes to medical bills than they are other types of debt.

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