Nov 21, 2024
Many Americans are looking for the best way to pay off medical bills. We get it, and we’re here to show you that you’re not alone and to help you figure it out.
There is no doubt that managing medical expenses can be challenging. Nearly half of U.S. adults (47%) say it is very or somewhat difficult for them to afford their healthcare costs, according to the Kaiser Family Foundation .
In fact, unexpected medical bills top the list of people’s financial worries.1 Fifty percent of Americans do not feel financially prepared to handle an unexpected medical expense, according to a national survey conducted by Discover® Personal Loans.*
To cope with the burden, some people put off other financial priorities. They may delay saving for retirement or paying credit card bills. In some cases, they even avoid going to the doctor, which could put their health at risk.
Managing your medical debt, though, doesn’t have to consume you. With the right knowledge and tools, you can start chipping away at your debt and gain some peace of mind. A personal loan for medical expenses might be one option that works for you.
But first, it’s important to learn ways to manage your medical debt. We have a four-step plan and some tips on how to manage your medical debt that may help put you back on the road to financial wellness.
Don’t assume that the bill you get from your provider is accurate. Medical bills may contain errors. These can include double billing, mistakes in medical billing codes, and charges for services not listed in your medical record.2 Call your providers—not the billing company—if you suspect an error. Ask for an itemized bill, which can alert you to mistakes like double billing.
If you feel overwhelmed by the process, you may have several options for help.
Some hospitals or clinics employ social workers to help. They can help you interpret your medical bills and might be able to file claims with your insurance company. You can access their services for free. The Patient Advocate Foundation, for example, offers free one-on-one help sorting out medical bills and negotiating with providers for people undergoing treatment for serious medical conditions. In some cases, employers may be able to help you find a medical assistance program or billing advocate.
If you can’t make headway on your own, consider working with a medical-billing advocate or other credit advisor. Nonprofits such as the National Federation for Credit Counseling may assist you with your overall debt. Those specializing in medical issues can help comb through your medical bills to find errors, duplicate charges, unreasonable charges, or even fraud. They may also help get denied claims reversed by your insurance company.
For big medical bills or complex issues, you might consider turning to an independent billing advocate. Be sure to understand how they charge and what the rates are. For example, is it an hourly rate or a percentage of what they save you? Hourly rates for such help can vary widely. Umbra Advocacy maintains a national directory of members of the Alliance of Professional Health Advocates.
Even a correct bill might be more than you can afford. Before resigning yourself to an overload of debt, there may be ways you can try to lower your medical bills.
Try negotiating a reduced amount directly with your provider. Healthcare providers may have leeway and might be willing to accept less than the amount they billed you. Uninsured patients are often charged higher rates, so providers may be willing to accept the negotiated rate they’d bill insured patients.
In addition, ask about financial assistance or charitable care. Many hospitals and clinics have such programs but don’t advertise them. Some states require hospitals to screen eligible patients for this type of assistance. This takes the burden off patients to do the research. Programs vary by hospital and state , but patients earning up to two times the federal poverty level—which for a family of four in most of the U.S. was $31,200 in 20243—may be eligible for financial assistance.
Managing any medical expenses you have now is important. No matter what your current situation is, though, it is also crucial to plan ahead.
Medical expenses are a fact of life. Healthcare ate up about 8% of the average family budget in 2023.4 It makes sense to set aside money every month toward this line item. But medical expenses often accumulate suddenly, typically after an unexpected illness or accident. This makes it difficult to budget sufficiently. That’s why it’s important to build up an emergency savings fund to help you deal with unforeseen expenses.
A Health Savings Account (HSA) or Flexible Spending Account (FSA) may help you budget. They provide a way for you to build up a tax-advantaged pool of money for some out-of-pocket healthcare. While this doesn’t lower your expenses, it might make it easier for you to pay medical bills.
If your medical expenses are significant, you might also want to consult with a tax advisor. They can discuss whether you have options to pay off medical bills in a tax-advantaged way.
Keep in mind that if you ignore medical bills long enough, some debt may go to collections and damage your credit score. This could make it difficult or more expensive to borrow in the future. Medical debt can also harm your credit score if it forces you to stop paying your other bills.
In all, 15 million Americans had medical bills on their credit reports in 2023. This includes more than $49 billion in collections.5
The good news is that in 2022 the three nationwide credit reporting agencies began removing paid medical debt from credit reports. In addition, they will not report unpaid medical debt unless it has been in collections for 12 months. And medical-collection debt with an initial reported balance of under $500 was removed from U.S. consumer credit reports beginning in 2023.6
While that’s a welcome development, significant medical debt can still be a burden. Nearly one-third (30%) of Americans cited debt as a cause of financial stress in our survey.* You don’t want to let medical expenses add to that stress.
Dealing with mounting medical bills and debt can feel overwhelming—especially if you’re also managing an illness. But you can lighten the load by making a concrete plan of action.
If you need to borrow money, start by finding a lender you can trust. With a debt consolidation loan you can pay multiple creditors at the same time. With Discover Personal Loans the money can be sent directly to many creditors or to your bank account.
You can also design your loan around you. Pick the amount you need and the repayment term from options offered to fit your budget.
By having one set regular monthly payment and knowing when your debt is due to be paid off, you may be able to gain greater financial control and lower your stress.
Articles may contain information from third parties. The inclusion of such information does not imply an affiliation with the bank or bank sponsorship, endorsement, or verification regarding the third party or information.
The information provided herein is for informational purposes only and is not intended to be construed as professional advice. Nothing contained in this article shall give rise to, or be construed to give rise to, any obligation or liability whatsoever on the part of Discover Bank or its affiliates.
*About the Survey
The national survey of 1,500 U.S. residents ages 18 and up was commissioned by Discover and conducted by Dynata (formerly Research Now/SSI), an independent survey research firm. The survey was fielded from April 16 through April 23, 2024. The maximum margin of sampling error was +/-3 percentage points with a 95 percent level of confidence.
