Medical bills can be overwhelming. But there are recommended methods to deal with medical debt while other options can have consequences.
Quick fixes and ignoring debt can compound debt and lower your credit scores. For example, placing debt on a credit card will resolve bills with your provider but will impose double-digit interest rates on you if the credit card bill is not fully paid. Putting off payment can start debt collection procedures and even a lawsuit.
There are better options. Health providers may agree to a payment plan where the bill is divided into equal payments over a few months until it is fully paid. But any billing charges or other fees can make this unaffordable.
Providers may accept medical credit cards instead which usually pay for specific procedures. Many are interest-free for six to 12 months. If you cannot pay off the card within that time, however, you may have to pay additional interest rates that were deferred.
Other options include a personal loan for medical expenses to consolidate expenses or pay for emergency or planned procedures. This may be recommended after the other options were used. Loans go from $1,000 to $100,000 but you should compare rates, fees and repayment terms.
A zero-interest credit card, dedicated only for medical bills, may be helpful if you are ineligible for a payment plan or medical credit card. The balance should be paid off before the promotional period ends and interest rates start. Excellent credit is needed for these cards, however.
Other options include a medical bill advocate if you had a lengthy hospital stay or intensive procedure. Advocates can review medical bills and costs, discover possible errors and overcharges and negotiate a lower bill. But you should assure that potential savings exceed the advocate’s fees.
You can also negotiate on your own behalf and seek price reductions or lower charges from billing errors or overcharges. If your debts are in collection, collectors may be willing to reduce the debt because it was purchased for pennies on the dollar.
Finally, providers may agree to an income-driven hardship plan for patients with low income and costly medical bills. Sometimes, patients must apply for Medicaid for plan eligibility. This plan may divide payments into more manageable options and reduce the amount owed.