Did you know that one in four Americans currently struggles with medical debt? Although 8.8% of Americans—that’s over 28 million citizens—don’t have health insurance, even those with medical insurance often end up paying out of pocket for significant medical expenses. In fact, 63% of insured Americans report using up all or most of their savings to pay their medical debt. This savings drain has caused 7% of Americans who carry medical debt to file for bankruptcy.

One of the most important aspects of the Affordable Care Act (A.C.A.), sometimes called Obamacare, was that it dropped the number of personal bankruptcies in the United States in relation to medical bills. According to Consumer Reports, personal bankruptcy filings decreased by just over 50% after the implementation of the A.C.A.

Sometimes you can receive a costly medical bill even with insurance. Although most medical practices and hospitals will bill the insurer as a courtesy, it is still your responsibility to ensure the bill is received by your insurance company. This may require calling your insurer to make certain they will have everything needed to process the payment.

In addition, bills can seem shockingly high and you may wonder if it’s accurately reflecting the amount you owe. This may require a bit of legwork as sometimes medical billings can have errors, such as when a procedure number is transposed or there’s a duplicate service. It is good practice to always examine the bill itself as well as the Explanation of Benefits an insurer sends to you. Then, if anything looks unfamiliar, reach out to the medical facility as well as the insurance company to ensure accuracy.

The United States spends an average of over $10,000 per person on health care costs each year—in fact, compared to countries around the globe with similar average life expectancy, the U.S. spends more money per citizen than any of them.

And medical debt is hurting 43 million Americans where it hurts—with their credit. When faced with high medical bills, it may seem good to pay them off with a credit card; however, there are smart alternatives that offer better protections. After reviewing the bills and removing any errors, discuss with the practitioner’s office if there’s an opportunity to settle the bill for a lower amount than you owe. Medical bills aren’t set in stone the way a credit card bill can be. Many medical facilities will allow for you to negotiate the final amount owed with no impact to your credit report. By offering to pay with a reasonable amount in a single payment—if you can afford to do so—can provide the most flexibility for a lower final amount. However, if you need a payment plan, then many medical facilities will work with you to find a monthly amount you can afford. Some healthcare providers offer payment options, such as:

  • Low Interest Payments: If you can’t pay the bill off in full, this interest rate will be advantageous in comparison to the interest rate on a credit card.
  • Agreed-To Amounts: Many providers work with patients to find a monthly amount that works within a patient’s budget without creating financial flags on a credit report.

In addition, if anything goes awry and you can’t pay the credit card bill, then late fees will be dings on your credit report. Whereas, paid medical bills don’t appear on your credit report and hospitals don’t report unpaid bills to the credit agencies. However, if medical bills aren’t paid after a certain period of time, they may be turned over to a collection agency. A medical bill can only impact your credit if the bill is sent to collections, which can result in a 50–100 point drop in your credit score.

Finally, if you do max out your credit and have trouble paying the bills, this will impact you long-term as it can damage your credit score. From buying a new car to getting a new cell phone plan, credit is important for everyday needs. Having good, solid credit can ensure you have options when you need them, plus save you money in fees and interest.

Review your options carefully when deciding how to repay your medical debt. Today’s choices will impact your future for years to come.

In summary, keep in mind these 5 tactics for dealing with medical bills:

  • Review bills for accuracy of services and billing codes
  • Review insurance company’s Explanation of Benefits to determine amount you owe
  • Negotiate with medical facility to lower final amount to something you can afford
  • Ask about payment plan options if you can’t immediately pay the final amount in full
  • Avoid using credit cards for payment of medical bills as there’s a greater risk to your credit score if you miss any payments

Finally, if after you apply these tactics and still feel overwhelmed by medical debt, then consider enrolling in a debt relief program like the one offered by Freedom Debt Relief. Such programs can help with debt negotiation and/or debt consolidation, plus offer credit counseling as part of the program. Enrollment can help to reduce financial stress as you know you’ll be on a path toward the solution. And always ensure to select a program with a company who is a member of the American Fair Credit Council (AFCC), as then you will have the help of a professional adviser who can be a partner for getting you on track.