Managing Medical Debt

high hospital bills

America's Medical Bill Problems

Increasing numbers of Americans are finding it difficult to keep up with medical bills, and the problem is not confined to the uninsured or the poor. As the cost of health care increases and employers and insurance companies look for ways to reduce their costs, patients are being asked to contribute more in deductibles and co-pays, often straining their personal and family finances.

Medical Bills a Major Problem for Many

A poll conducted in April by the Kaiser Family Foundation revealed that 28 percent of Americans considered health care bills to be a serious financial problem for them or their families. The Commonwealth Fund, a private organization with a mission of promoting a high performing and accessible health care system, reported that 41 percent of American adults have medical bills or have trouble paying medical bills, a 7 percent increase from 2005.

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And, it's estimated that about 2 million Americans (primary debtors and their dependents) are affected by bankruptcies caused by medical bills each year. With credit sources becoming more scarce and medical costs showing no signs of leveling off, many experts predict that number will continue to rise.

Possible Consequences of Medical Debt

While a catastrophic illness or accident is likely to result in major bills and wreak havoc with your budget, even illnesses such as chronic asthma or a non-life threatening injury can result in high bills. Patients unable to pay could face referral to a collection agency, garnished wages or even legal action. So, what should you do if you find yourself saddled with medical bills you're unable to pay?

Request to Pay Over Time

Do not ignore them. If you can't pay your medical bills on time, talk to health care providers and hospital representatives about working out a payment schedule. While hospitals, physicians and other health care providers are not obligated to do so, many will be flexible with patients who are struggling with medical bills. You may be able to get a no-interest payment plan, or your provider may even be willing to waive a portion of your bill. Be up front about your ability or lack of ability to pay.

Appeal a Denied Service or Treatment

Read your medical bills carefully and appeal the decision if your insurer refuses to cover a service or treatment. If you don't get any satisfaction from the insurance company and you feel you've been wronged, contact your state's health department.

Avoid Putting Medical Expenses on High-Interest Credit Cards

Do not put medical bills on credit cards if you will not be able to pay them off within a reasonable period of time. Some health care providers advise you to open a medical credit card, which is used solely for the purpose of paying medical bills. The catch, however, is that while these might carry low-interest introductory rates, the rates can quickly double or triple. Unpaid medical bills do not affect your credit rating score as negatively as late or skipped payments on credit cards, so think carefully before using a card.

Consider Debt Consolidation Cautiously

Watch out for debt consolidation programs or loans that sound too good to be true, or those that use your home as collateral. There are a lot of for profit companies offering debt consolidation. If you want to explore this route, it's best to get some expert advice.

Check Out Your Eligibility for Assistance

If you don't have insurance, check to see if you are eligible for Medicaid or the State Children's Health Insurance Program (SCHIP), which covers anyone who qualifies up to age 18. You can learn more about who is eligible for Medicaid at More information about the SCHIP programs is available at There also are programs that may offer help in paying your medical bills. The Patient Advocate Foundation offers a state-by-state directory of programs, as well as a co-pay relief directory.

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While medical debt is mounting nationally, there are steps you can take to manage it. If you are one of the 28 percent of Americans for whom medical debt is a serious financial problem, considering consulting a professional financial consultant or lawyer.

About Medical Debt

  • Medical debt is an increasingly common, and serious, problem
  • Those unable to pay medical bills should pursue payment plan options, appeal insurers' denials to cover services, and determine whether they qualify for medical assistance or help with their bills.
  • Do not attempt to solve your medical debt problem by paying with a high-interest credit card or using a debt consolidation program that puts your home at risk. Negotiating directly with the company is a better alternative.
  • Seek the advice of a professional if you have substantial medical debt that you're unable to pay.