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How to pay off your medical Charges Six Options
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How to Pay off Your Medical Costs: 6 Options
Do you need a way to pay your medical bills? Consider an installment plan, or use an medical credit card or engage an advocate for medical bills.
by Sean Pyles Senior Writer | Personal finance and debt Sean Pyles leads podcasting at NerdWallet as the host and producer of the NerdWallet’s “Smart Money” podcast. On “Smart Money,” Sean talks with Nerds from the NerdWallet Content team to answer the questions of listeners about their personal finances. With a particular focus on sensible and actionable money advice, Sean provides real-world guidance that can help consumers better in their finances. In addition to answering listeners’ financial questions on “Smart Money,” Sean also interviews guests who are not part of NerdWallet and produces special segments on topics like the racial wealth gap, how to start investing, and the history of student loans.
Before Sean took over podcasting for NerdWallet He also covered issues concerning consumer debt. His writing has been featured on USA Today, The New York Times and other publications. When he’s not writing about personal finances, Sean can be found digging around the garden, taking walks, or walking his dog for long walks. Sean is located in Ocean Shores, Washington.
Jan 13th 2023
Editor: Kathy Hinson Lead Assigning Editor Personal finances, credit scoring financial management and debt Kathy Hinson leads the core personal finance team at NerdWallet. Prior to joining NerdWallet, she worked for 18 years working at The Oregonian in Portland in roles including copy desk chief and team director of design and editing. Her previous experience included copy editing and news for various Southern California newspapers, including the Los Angeles Times. She graduated with a bachelor’s in mass communication and journalism in Iowa’s University of Iowa.
The majority or all of the products we feature are provided by our partners, who pay us. This affects the products we feature and the location and manner in which the product is displayed on the page. But, it doesn’t affect our assessments. Our opinions are our own. Here is a list of and .
Nerdy Tip
Big changes have come to how medical debt is reported by the three major U.S. credit agencies. Since July 1st, 2022, consumers can expect to have paid medical debt removed from their credit report and the delay before unpaid medical debt appears on credit reports has increased from six months to one year. In mid-2023, unpaid medical debt less than $500 will not appear on credit reports. VantageScore anticipates that it will remove all unpaid and paid medical debt regardless of how much is owed or the length of time the debt has been in collection — from 3.0 and 4.0 score calculations at the at the end of January 2023.
Repaying medical debts isn’t as straightforward as resolving issues with the case with a loan or credit card. There’s usually more flexibility to negotiate conditions of repayment or even cut the amount you owe. And you may have additional recourses that are granted by the .
For a start, go through the medical bill you received and then compare it to the explanation of benefits you received, if you have insurance. Find out the amount you’re expected to spend, but do not exceed the mistake of assuming that you can’t. try to negotiate the total cost first.
When working with your service provider Be upfront about the amount you can pay. When you’re not insured, you’ll probably be paid more than someone with insurance. Knowing that there’s a price difference could give you leverage.
“That could be helpful for negotiations when you have to pay for the cost,” says Chi Chi Wu Chi Chi Wu, a staff attorney at the National Consumer Law Center. “Tell them that you’ll be paying the amount that BlueCross or Medicaid would be paying.”
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Payment plan
A variety of medical professionals, such as dentists, doctors and hospitals, can come up with an interest-free or low-interest arrangement for paying your bills. This is among the most simple and common methods to settle an unpaid bill with one payment.
The amount you must pay for your payment plan will depend on the amount of your bill and the terms you agree to. It is common to break your bill into multiple equal payments over a few months until the total is covered.
Tips: Find out whether there are charges for billing or other charges that are associated with the payment plan so you can assess the affordability.
Medical credit cards
Providers may also offer to assist you with applying for . While medical credit cards generally have an interest-free period of 6 to 12-months, it is possible that you could be slapped with a charge which can make your debt significantly more expensive if you do not complete the payment during that time. A further risk attached to credit card is the possibility that failing to make payments or paying late can have a negative impact on the credit rating.
Tip: Know what extra expenses you’ll face if hit with deferred interest to be aware of whether a medical credit card makes sense to you.
Options for credit that aren’t secured
Personal loans
A can help you to consolidate medical bills or cover emergency as well as planned medical procedures.
A personal loan may be best when you’ve exhausted all other options, like an installment plan or a medical credit card, however there are also risks of fees, interest and negative effects on credit scores if you miss payments. Loan amounts range from $1,000 to $100,000.
TIP: Always search around to compare rates, fees and repayment terms.
0% interest credit card
It could be a viable option if you aren’t suitable for a credit card healthcare credit or a payment program. You’ll need excellent to good credit score to be eligible, however. Be sure to pay off your balance before the period of interest promotion ends and an interest rate kicks in. Missing payments can also hurt your credit score.
Tip: Dedicate the card only to medical expenses if you choose to go this route. In the event that you don’t, it will be difficult to keep records of the expenses for tax deductions or medical savings accounts.
Advocate for medical bills
If you’ve experienced an extended stay in the hospital or an intensive procedure, you’re probably facing an avalanche of medical expenses.
You can hire an advocate for medical bills to negotiate on your behalf. Advocates are specialists in medical billing who know how to read health care bills and are familiar with the common expenses for the procedures. They can spot possible errors or overcharging and can help reduce the amount you owe.
Organizations such as Medical Billing Advocates of America can help you connect with an advocate. Be careful when selecting a billing advocate because there are also predators out in the world who claim to be advocates but are stealing your money or your identity. Be sure to know who you are talking to and how they operate before sharing any of your information.
Tip: Make sure the cost incurred by an advocate for medical bills would be outweighed by the savings prior to signing up for a plan.
Income-driven hardship plan
If you have low income and high medical bills If you have a high medical bill, you could be eligible for an income-driven hardship program.
Similar to a regular payment plan an income-driven hardship program could break down the entire amount you owe into more affordable, regular payments or even erase the debt entirely. Talk with your provider to determine whether it has the kind of plan you need; most non-profit hospitals provide some type of charitable treatment.
Tip: You may have to apply for before being qualified.
Costs that you negotiate on your own
If you have or you believe you could do the work of a medical bill advocate, you may be able to bargain down the price on your medical expenses on your own.
For medical bills that are in collections, remember that debt collectors typically purchase debts for pennies on the dollar. That gives you some good leverage to negotiate.
If you think you can negotiate with your healthcare provider, you may be capable of taking the work of a medical bill advocate in your own hands. Comb through your medical bills and spot any charges that seem wrong or excessive, and be persistent in following up with the customer service reps.
Tip: Don’t be afraid to speak to your provider. Make sure you can afford the things you’re committing to. You could have the option of choosing in between lump sum or an installment plan.
Summary of the medical debt repayment options
What should you avoid doing
You may be tempted to take a shot at an easy solution to your medical debt — or to ignore it entirely. But doing so can cost you more interest, and put your finances at risk. Taking a smart approach to pay off medical bills will help you avoid being late, despite recent changes.
Putting medical debt on one of your credit cards is an instance. That will appease your doctor’s office, but you typically will face a double-digit interest rate in the event that you aren’t able to pay the debt in full when your card statement arrives.
If you’re worried that you’re able to afford your medical bills and you’re confronted with debt that is overwhelming or you are having to make a choice between housing, food and payment on debt, think about looking at or even .
About the author: Sean Pyles is the executive producer and host of NerdWallet’s Smart Money podcast. His writing has appeared on The New York Times, USA Today and elsewhere.
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