Debt Consolidation

Medical Bill Debt Relief Options

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If you’re facing medical debt, you’re not alone. The cost of family medical coverage in 2019 was $20,576, according to a 2019 study by the Kaiser Family Foundation. That’s enough to put people without adequate health insurance into medical debt. But even if you have good healthcare insurance, getting into medical debt could be unavoidable if you or a family member requires ongoing treatment for a medical condition or injuries.

Fortunately, there are medical bill debt relief options to help you get through this financial roadblock, including payment plans, hardship plans, and debt settlement.

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 medical debt relief option is good 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 altogether.

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 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 a longer period of time. If you are a low-income patient with Medicaid, you may be eligible for an income-driven hardship medical bill debt relief 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 to settle medical debt on your behalf.

Here’s how a debt settlement program works:

  • You stop making your monthly payments and instead deposit money 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, and you’ve paid the settled amount, your debt will be considered paid in full.
  • The debt settlement company will collect its fee (usually 15%-25% of your enrolled debt).

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 about 24 to 48 months, this may be a type of medical bill debt relief that is a good option for you.

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-free 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 debt relief through 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.

Bankruptcy

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 an option 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 another 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 medical bill debt relief options available to you to determine which one is ideal for your budget and lifestyle needs.

Explore medical bill debt relief and other options for a brighter future

If you’re struggling with debt or wondering how you’ll be able to afford your medical bills, it might be time to take action. Freedom Debt Relief can help you understand your options for dealing with your medical bills or other debts, including our debt relief program. Our Certified Debt Consultants can help you find the right solution to help you achieve a brighter financial future. Find out if you qualify right now.

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