About 18% of all American adults have medical debt in collections, according to a new study by the Journal of the American Medical Association (JAMA) that analyzed credit reporting data of millions of consumers over a 10-year period.
But these findings only scratch the surface of the reality that many patients experience after seeking medical care in the United States. While the JAMA study accounts for medical debt in collections, it doesn't account for credit card debt and loans that patients have taken out to pay for doctors visits, medications, emergency room visits and other types of medical treatment.
If you're stuck with unmanageable debt due to medical bills, you have several options for paying it off. Keep reading to learn more about dealing with medical debt, from negotiating your bill to consolidating your debt with a personal loan.
You can shop around for a variety of financial products on Credible to get the lowest possible interest rate for your situation.
Try to negotiate down the balance of your medical bill first
Health care costs vary widely depending on the circumstances, such as the provider you choose, your health insurance coverage and even where you live. Because of this, it may be possible to negotiate your medical bills to a lower amount. More than half of patients who tried to negotiate their medical bills were successful, according to a 2018 survey from Consumer Reports.
Here are a few things you should do to prepare yourself for medical bill negotiations:
- Check your bill for errors. You may have been billed in error if your service was coded incorrectly or your insurance company denied a claim they should've paid out.
- Compare the cost of service. Websites like Healthcare Bluebook list the estimated cost of medical services across health care providers, so you can see if you've been overcharged.
- Explain why you need help. A medical billing office may be more willing to negotiate if you've recently lost your job or if your health care needs have changed.
You should also see if you qualify for financial aid based on household income. Nonprofit hospitals in the United States are required by federal law to offer financial assistance programs for low-income patients, such as interest-free payment plans and discounted care.
Pay off your medical debt with a personal loan
Unpaid medical bills can end up with a collection agency, which can ding your credit report and bring debt collectors to your doorstep. Before it gets to this point, consider paying off your medical debt with a personal loan.
Personal loans are lump-sum loans that are repaid in fixed monthly installments over a set period of time, typically a few years. Funding can be disbursed directly into your bank account in a few business days, so you can pay off overdue medical bills as soon as possible.
Unsecured personal loans don't require collateral, which means they can be used to repay virtually any type of debt. Lenders look closely at your credit score and debt-to-income ratio when determining eligibility. Personal loan interest rates vary widely depending on your financial situation, so it's important to shop around with multiple lenders to get the best rate.
You can browse estimated personal loan rates without impacting your credit score on Credible.
Use a medical credit card or 0% APR credit card
It's typically not advised to cover medical costs with a credit card due to high interest rates, but there are exceptions. For example, medical credit cards may offer no-interest or reduced-interest payment plans to help patients spread their payments over a set period of time. Make sure you read the card agreement thoroughly, though, to understand any fees and the annual percentage rate (APR).
You could also consider opening a credit card with a zero-interest introductory period to take care of unpaid medical bills. These 0% APR periods typically last up to 18 months, which can give you plenty of time to split up your medical debt into smaller monthly payments. These offers are reserved for borrowers with good credit, which is defined by the FICO model as a score of 670 or higher.
Browse your options for credit cards, including 0% APR credit cards, on Credible's online marketplace.
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