Debt Consolidation

How to Pay Off Medical Debt

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If you’re facing medical debt, you’re not alone. According to a recent study by the Kaiser Family Foundation, the cost of family medical coverage in 2019 was $20,576—enough to put people who don’t have adequate healthcare insurance into medical debt. But even if you have good healthcare insurance, getting into medical debt could almost be unavoidable if you or a family member requires ongoing treatment for a medical condition or injuries from an accident. 

Fortunately, there are ways you can pay off medical debt and get through this financial roadblock in your life. Keep reading to learn what they are. 

What Are Your Options for Paying Off Medical Debt?

Payment Plans Medical Bill Advocates Income-Driven Hardship Plan Debt Settlement Medical Credit Cards Medical Bill Forgiveness Bankruptcy
What’s Involved? A payment plan that breaks your bills into multiple equal payments over several months until you’ve paid off the total. A medical advocate negotiates your medical bills by looking for errors or overcharges. A payment plan with low monthly payments that you may qualify for if you have low income and high medical bills. You or a company you hire negotiates with your medical provider to reduce the total amount you owe. A credit card designed to provide funds for medical procedures that are to be paid back over time. Your medical bills may be forgiven if you have a hardship such as a disability that prevents you from working.  A legal process where your assets are closely examined and used to pay off debts or a debt repayment plan is designed. Chapter 7 and Chapter 13 are the two types of bankruptcies.
  • Zero-interest payment plans are available
  • Fixed monthly payments
  • Can help you understand your medical bills and reduce them
  • A way to avoid bankruptcy
  • Manageable monthly payments for your income level
  • Providers may reduce your debt
  • May significantly reduce your total medical debt
  • One, low deposit every month
  • May be interest-free if you qualify
  • Accepted by most medical providers
  • Providers may forgive your medical debt completely
  • Stops collection activity
  • The opportunity to discharge or wipe out your medical debt
    • A short 3 to 6 month process (Chapter 7)
  • Many payment plans come with interest and fees
  • Could end up paying a lot more interest over the term of your plan
  • Fees are involved
  • Cost may outweigh savings
  • May have to apply for Medicaid to become eligible
  • Not offered by all providers
  • Collection activity may increase
  • Negative impact on your credit
  • Fees are involved
  • May not qualify if you have poor credit
  • Interest rates can be high, especially after an introductory period
  • Must have a hardship such as a disability to qualify
  • Will need to show proof that you have no means to pay for your bills
  • You may lose some of your assets (Chapter 7)
  • Long-term, negative effect on your credit score
  • Must meet strict criteria to qualify (Chapter 7)

Medical Payment Plans

Medical payment plans allow you to pay off your medical bills over time through fixed, monthly payments. They may be a good option if you don’t have the cash up front to pay for your bills or feel more comfortable paying for them in monthly installments. Fortunately, doctors, dentists, and many other medical providers often offer payment plans to their patients. 

If you believe this is a good route for you, make sure you find out whether there will be any interest charges and/or fees. You may be able to qualify for a zero-interest payment plan and avoid paying interest.

Medical Bill Advocates

Medical bill advocates are essentially medical billing experts who can negotiate medical bills on your behalf. Since they are well-versed in reading healthcare bills and are familiar with the typical costs for various procedures, they can catch errors or overcharges and may be able to reduce the amount of medical debt you owe. 

Some medical bill advocates charge hourly fees to evaluate one bill, while others charge a percentage of the costs they’re able to recover for you once they have successfully negotiated a bill for you. Before working with a medical bill advocate, ensure their fees would be outweighed by how much they’ll be able to save you.

A medical bill advocate may make sense if you have an overwhelming amount of medical debt or believe there are errors on your bills. To make sure you find a reputable one, ask your medical provider for recommendations or contact the Claims Assistance Professionals and Advocates

Income-Driven Hardship Plans

Income-driven hardship plans are similar to typical medical payment plans but they spread out smaller monthly payments over time. If you are a low-income patient with Medicaid, you may be eligible for an income-driven hardship plan if your provider offers it. 

With an income-driven hardship plan, you may even be able to get your medical debt reduced by your provider. Therefore, if you qualify for this option, it’s a good idea to move forward with it as soon as you receive your medical bills. 

Debt Settlement

Debt settlement involves negotiating with your creditors to settle for less than the outstanding balance of your medical debt. While you can do this on your own, you may feel more comfortable trusting a professional debt settlement company like Freedom Debt Relief to settle medical debt on your behalf. 

Here’s how a debt settlement program works: You make a monthly deposit into a special account that you control. After you have enough money in the account, the debt settlement company will reach out to your creditors to negotiate a debt reduction. If and when your debt is settled, the debt settlement company will collect its fee, which is usually 15%-25% of your enrolled debt and was already included in your monthly program payments.

If you don’t think you’ll be able to make monthly payments through a medical payment plan and like the idea of potentially being able to settle your debt for less in as little as 24 to 48 months, debt settlement may be a wise choice. 

Medical Credit Cards

You may want to consider medical credit cards if your provider doesn’t accept medical payment plans and you’re confident you can pay off your debt in a fairly short time frame. Medical credit cards are usually designed for specific medical procedures and often offer an interest-free period that ranges from six to 12 months. 

If you’re unable to pay off your medical debt during the interest-period, you may face a high interest rate and be forced to pay substantially more for your medical bills. For this reason, you should do the math and figure out if the interest-free period is enough time for you to get rid of your debt. 

Medical Bill Forgiveness 

Medical bill forgiveness may be an option for you if you have a hardship like a disability that prevents you from working and paying your medical debt. You may be able to petition your provider so you can get your debt completely forgiven by calling them up, explaining why you can’t pay them back, and asking them to forgive your debt based on your hardship. 

Keep in mind that if you opt for medical bill forgiveness, you’ll have to show your provider proof that you are unable to pay your bills. Tax returns and written documents will likely be necessary to do so. 


If you’ve exhausted all other options, the legal process of bankruptcy may be a viable way for you to pay off medical debt. Chapter 7 bankruptcy may be a wise move if you have little to no disposable income (money left over after you’ve paid your taxes and necessary expenses). During Chapter 7 bankruptcy, most of your possessions will be sold so that your medical debt and other debts can be repaid. 

Chapter 13 bankruptcy may be an option if you do not qualify for Chapter 7 because you have sufficient income. This form of bankruptcy can give you the chance to make one, consolidated payment toward your debts via a repayment plan that spans anywhere from three to five years. 

While medical debt can be overwhelming, it is possible to pay it off. Take the time to consider all of the options available to you to determine which one is ideal for your budget and lifestyle needs. 

Anna Baluch is a freelance writer who enjoys writing about all personal finance topics. She’s particularly interested in mortgages, retirement, insurance, and investing.