By Mary Reed. Updated October 9, 2020.
A serious illness, an ambulance ride, or even a relatively brief hospital stay are apt to leave you with a pile of medical bills that you cannot afford to pay, even if you have health insurance. And, if you don’t pay them, or don’t pay them quickly enough, the bills are likely to be sent to medical debt collectors.
Medical debt collection is a serious problem affecting millions of Americans. Strategies for dealing with medical bills in collections include:
Here we will help you understand your options for dealing with medical bills you can't afford, including those that have been turned over to collection agencies.
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Every medical provider has its own policies, but here are some of the things that a doctor, a hospital or another medical service provider may do to collect the bills you don’t pay:
Warning: When you don’t pay a medical debt, the amount of the debt may increase over time because the medical provider’s billing department may add late fees every month to your outstanding balance.
You may end up with a medical debt in collections:
Here are 3 options if you are facing medical bills you can't pay.
1. Set up a payment plan with the provider. Contact the billing offices of your medical providers to find out if you can pay your past due bills over time. But first, make sure you have a realistic idea of exactly how much you can afford to pay each month and never agree to a payment amount you don’t think you can make. Making small payments indefinitely is not likely to solve the problem.
Also, if a medical provider agrees to a payment plan, get all of the terms of the plan in writing and don’t sign the agreement unless you are clear about the interest rate on the plan and the plan’s other terms, including when will you be considered to have defaulted on the agreement and what will happen if you do. For example, if you default (fall behind), the medical provider may refuse to provide you with any additional health care until you get caught up.
Once an installment plan is in place, let the medical provider know immediately if you are not going to be able to make a payment in a particular month or if you need to renegotiate the terms of plan because you cannot keep up with the payments you agreed to. Being proactive may help you avoid the consequences of a default.
2. Set up a payment plan with the debt collector. If the debt collector has already turned your account over to collections you may be able to work out a payment plan. Be careful though: If you agree to very small payments on a large debt you may never be able to pay it off, and if you fall behind with the debt collector it may sue you to collect.
3. Settle your medical bills. When you settle a debt with a medical provider, the billing office or the collection agency agrees to accept less than the full amount that you owe. Never pay any money to a provider unless you have all of the terms of the settlement in writing and you understand each and every one of them. You may want to get professional help to settle debts if you cannot do it yourself.
4. File for consumer bankruptcy. Sometimes, filing for bankruptcy is the best way to deal with medical debt collection accounts. In fact, past due medical bills are one of the leading causes of bankruptcy in this country. Always consult with a consumer bankruptcy attorney to find out whether it’s a good option for you.
Talk with a bankruptcy attorney for free by calling 1-888-495-0133.
Tip: Although having a bankruptcy in your credit report will harm your credit scores, your past due bills have already badly damaged your credit score, and filing for bankruptcy may be the wisest way for you to get out of debt. A consumer bankruptcy attorney will help you figure it out.
Try not to ignore your health care bills. Even if you cannot pay them, contact the billing department of the medical providers to whom you owe money. Let them know that you want to pay what you owe and explain why you can’t do that right now. You may also want to explore one or both of the options below for resolving your debt.
The statute of limitations on a debt may make it more difficult for medical providers as well as debt collectors to successfully sue you for the money you owe after a certain period of time has passed. The clock starts ticking after you have missed your first debt payment. Once the statute of limitations is up, a health care provider or a debt collector may be able to still try to get you to pay the debt, but if they file a lawsuit you may stop it by raising the statute of limitations as a defense.
The length of the statute of limitations differs by type of debt and also varies from state-to-state. If you want to know what it is in your state, check with a consumer law attorney or state attorney general’s office. By the way, a debt that you can no longer be sued for is referred to as a "time-barred" debt.
Warning: Some consumers believe that their medical debt will magically go away after seven years. Not true! Although the debt will no longer appear on their credit reports and no longer affect their credit scores, they still owe the money and medical debt collectors can still try to collect it. Again, though, the statute of limitations may help if you are sued for that debt.
In addition, some medical providers may try to pressure you into paying your delinquent debts by refusing to provide you with additional medical care until you do. This may happen even if you are paying off your debts over time by making monthly payments on an installment plan that you and a provider agreed to. Also, some of your medical providers may have a policy that as long as you owe them money, you must pay up-front for any future health care they provide to you.
If you have no success pursuing an installment plan or debt settlement, here are some other options you may want to consider in order to pay your past due medical bills:
It’s not unusual for health insurers to deny coverage for health care bills. If this happens to you and you believe that the care should be covered by your insurance, or if your insurer pays some but not all of a medical bill and you think it should pay the entire bill, here’s what we recommend:
If you receive medical care inside or outside a hospital and/or if you are transported to a hospital in an ambulance and you have no medical insurance, a limited income and/or if you own few assets, find out if you qualify for charity care. Also, some doctors provide this kind of care to their low-income patients. To qualify for charity care however, you may have to prove that you applied for and were denied Medicaid coverage for the services you cannot pay for. Medicaid is a federal-state program that helps pay the costs of medical care for people with low incomes and few if any assets.
Tip: Some doctors and hospitals offer discounts to uninsured patients even if the patients are not low income.
If you are not already enrolled in Medicaid, find out if you qualify for the program. If you do, Medicaid will pay any medical debt that you’ve already incurred, assuming that the debt was for care and services that it normally covers and that the debt is not more than three months old.
Be aware that some medical providers refer patients who can’t afford to pay for their medical care to creditors who will finance its cost, but at a very high interest rate! These creditors include finance companies and some credit card companies.
Other medical providers may encourage you to come up with the money you need to pay your medical expenses by getting a personal loan, by refinancing your home and getting cash out, or by borrowing against the equity in your home. The latter two options are especially risky because if you can’t keep up with the payments on your new mortgage or fall behind on your home equity loan, you risk losing your home.