How to Pay Off Medical Bills

Understanding your medical bills

Medical debt is a unique kind of financial burden. Unlike a choice to buy a car or a home, health care expenses often arrive uninvited, following a crisis or a necessary procedure. The complexity of the U.S. health care billing system means that many Americans are left staring at bills they don’t understand and aren’t sure they can afford.

Unfortunately, the U.S. health care system is also notorious for billing and insurance errors. One study by Becker’s Hospital CFO Report found that billing advocates estimated that 80% of hospital bills contain errors. With this in mind, you should never take a medical bill at face value.

When a bill arrives, it is usually a general summary. To protect yourself and identify errors, you must request an itemized bill that includes CPT codes. These codes, standardized by the American Medical Association, act like medical care price tags. Under the Health Insurance Portability and Accountability Act (HIPAA), you have a legal right to these records.

Common billing errors to look for include:

• Incorrect dates of medical procedures
• Incorrect billing codes
• Wrong name on the account
• Unfamiliar charges, such as vague indicators like “equipment”
• Duplicate charges or overcharges

If you face resistance, politely ask to speak with a supervisor and cite your HIPAA rights to access your complete billing records. Once you have the itemized list, cross-reference it with your insurance paperwork to ensure your provider has covered everything they committed to in your plan.

What is the No Surprises Act?

The No Surprises Act protects you from unexpected bills when receiving emergency services from out-of-network facilities or providers. In these cases, your bills should be similar to what you would pay for in-network care.

If you believe a provider has violated this law, you can contact the Centers for Medicare and Medicaid Services No Surprises Help Desk at 1-800-985-3059 or submit a complaint online.

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Negotiate your medical bills

"It’s a little-known secret in the American health care industry that all medical bills are negotiable," said Dr. Virgie Bright Ellington, a medical billing expert at Crush Medical Debt. You should always attempt to negotiate before sending payment due to the lack of transparency in health care pricing.

This is why obtaining CPT codes is so important, according to Ellington. Once you have your CPT codes, you can search online for the Medicare rates for each service. Knowing what Medicare pays versus what the provider is charging you offers significant leverage. You might try offering a lump-sum payment closer to the Medicare rate to see if the provider’s billing department will accept it.

Another aspect of negotiating is discussing your actual ability to pay. Blake Whitten, financial advisor at Whitten Retirement Solutions, said, “Start by contacting the billing department or health care provider directly, explaining your situation politely and thoroughly.” Providing proof of financial hardship, such as pay stubs or tax returns, can strengthen your case.

Be proactive about medical care to help avoid excessive bills. For example, the Patient Advocate Foundation advises using in-network health care facilities and providers for nonemergency care and checking in advance whether they have a contract with your insurance company.

Check to see if you qualify for assistance

If negotiation isn't enough, several government and nonprofit programs offer coverage or help with outstanding balances. Eligibility is generally based on income, age, or health status. Some of these programs require you to sign up prior to receiving care, not after you’ve received a bill, so it's best to check requirements before treatment when possible.

Medicaid

Medicaid and the Children's Health Insurance Program (CHIP) provide free or low-cost medical benefits to low-income adults, children, those over 65, those who are pregnant and those with disabilities. Income eligibility applies, and not all providers accept Medicaid; check before using a particular provider.

Medicare

You’re eligible to apply for Medicare if you’re 65 or older or have a specific disease or disability, like End-Stage Renal Disease (ESRD) or ALS (Lou Gehrig’s Disease). Different parts of Medicare cover hospitalizations, prescriptions and other medical costs.

Affordable Care Act (ACA)

The ACA provides the Health Insurance Marketplace, where the uninsured can find coverage. You must live in the U.S., be a U.S. citizen or national and not be incarcerated. Start at HealthCare.gov to determine your eligibility and apply during open enrollment.

Consolidated Omnibus Budget Reconciliation Act (COBRA)

COBRA provides temporary insurance coverage to those who have recently left an employer. You must have a group health plan covered by COBRA, and there must be a qualifying event for which you are a qualifying beneficiary. Qualifying events include termination of employment, divorce or separation from a covered employee and certain other life events.

Charity care and other options

Many hospitals and providers have a Financial Assistance Policy (FAP), often referred to as charity care. This is typically available to the uninsured or underinsured after insurance or Medicaid has been applied. 

You may also be eligible for additional specialized assistance for specific medical needs. Some organizations include:

• United Healthcare Children’s Foundation
• HealthWell Foundation
• Patient Access Network Foundation
• Patient Advocate Foundation

Medical credit cards and financing

Health care providers often promote medical credit cards to finance care. While these cards often offer a temporary deferred-interest period, they come with significant downsides.

Whitten advises caution, noting that low rates can skyrocket after the promotion ends: “While they may offer low or zero interest rates initially, watch out for high rates after promotions end and potential fees for late payments or exceeding credit limits.”

Ellington also warns against medical credit cards. “Medical credit cards can be included on your credit report, particularly if you miss payments on the card, and lower your FICO score,” added Ellington. Transferring medical debt to a credit card turns it into "nonmedical consumer debt," stripping away special legal protections.

Beyond the risk of high interest, using a medical credit card could lead to the loss of your power to negotiate medical bills, and you may face aggressive calls from debt collectors if you don’t pay.

The CFPB also warns that providers may receive incentives for signups, which can lead them to downplay better financial assistance options. CFPB Director Rohit Chopra said, “Financial firms are partnering with health care players to push products that can drive patients deep into debt.”

Overall, these red flags for medical credit cards should prompt you to approach them with caution.

Alternative credit options

If you’ve already verified your bills and explored assistance, you might consider alternative credit options. It’s possible to pay off medical debt using a personal loan or a 0% interest credit card, but there are some risks involved in moving your medical debt.

Whitten explains that with a personal loan, you can often consolidate multiple bills and get fixed rates and predictable payments. But be wary of taking out new debt to pay off medical debt, as you may end up owing more than your initial bills thanks to interest charges and loan fees.

A 0% credit card can be a good tool if you are already carrying medical debt on a high-interest card and can qualify for a balance transfer, but look into similar financing options through your provider first. Ellington cautioned against using credit or loans to pay off medical bills and added that, “Bills and debts owed to medical providers have special protections that are lost if we transfer them to nonmedical consumer debt.”

According to the CFPB, the three major credit reporting bureaus in the U.S. no longer report medical debts under $500 or those less than one year old. That’s a big reason to try to avoid putting your medical debt onto a credit card or personal loan. However, recent legal changes have created uncertainty around these protections, as a federal court has vacated rules that previously restricted the reporting of medical debt.

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FAQ

Bottom line

Medical debt can feel insurmountable, but assistance programs and strategies can help. Your first step should always be to verify your bills using itemized CPT codes and compare them to Medicare rates. Before turning to high-interest credit cards or loans, explore government assistance and hospital charity care programs, as these help preserve your legal consumer protections.