6 options for dealing with debt

Getting a large medical bill is overwhelming, and unfortunately, it’s a common problem in the U.S. Twelve percent of American adults borrowed $74 billion to pay for medical bills in 2024, according to a Gallup survey, and 58% of Americans are worried that a health issue could lead to medical debt.

If you’re struggling with how to pay medical bills, it’s important to know that you have a lot of options. You’re also afforded certain protections from medical bills that you don’t get with other forms of debt. Here are your options for paying medical bills, how medical debt affects your credit, and what happens if you don’t pay your medical bills.

Medical debt affects your credit a bit differently than other types of debt. Most medical providers don’t report to credit bureaus. But if they send your bill to collections, which typically won’t happen until it’s at least 60 days past due, medical bills could appear on your credit reports.

Some recent credit reporting changes offer an extra layer of protection for those struggling with medical debt:

• Small debts aren’t reported. Since April 2023, the three major credit bureaus — Equifax, Experian, and TransUnion — have removed medical collections under $500 from credit reports. Therefore, smaller medical bills in collections no longer impact your credit scores.

• You have a one-year grace period. Credit bureaus now give you a 365-day grace period before any medical bills in collection appear on your credit reports, giving you extra time to resolve medical billing errors and insurance disputes.

• Old debts that are repaid can be removed. Unpaid medical bills in collections that are at least $500 and one year old will still appear on your credit reports for up to seven years, which could damage your credit scores. However, if you or your insurer pays off a medical bill in collections, the item will be removed from your credit reports.

It’s essential to understand that you’ll lose these protections if you charge your medical bills to a credit card or repay them with a loan. Once you pay medical bills with a credit card or loan, it’s treated as regular consumer debt instead of medical debt. That includes medical credit cards and third-party payment plans, which we’ll discuss in greater detail in the next section.

Unlike medical bills, these accounts will appear on your credit reports and affect your credit scores like any other regular debt. If your accounts go to collections, they won’t be subject to the lenient credit-reporting rules that medical bills are afforded.

In January 2025, the Consumer Financial Protection Bureau (CFPB) ruled that medical bills would be removed credit reports. However, that was overturned by a judge in July, leaving borrowers with overdue medical debt facing adverse credit scores. More than a dozen states have created their own laws restricting the ill effects of medical debt.

There are several strategies to deal with medical bills, but whatever you do, don’t ignore them. Here are some ways to handle a medical bill you can’t afford.

It’s not uncommon for medical bills to contain errors, but identifying them can be tough if you’re not a healthcare professional. Still, you should ask your doctor or the hospital for a copy of your medical records and compare them to your bill. Contact the provider’s billing office if you think there’s a mistake. Watch for:

• Double-billing: Getting charged twice for the same service is pretty common, especially if more than one provider cared for you. Contact each provider’s billing department if you suspect you were double-billed.

• Services that aren’t listed in your medical records: Dispute any service you were billed for if it isn’t documented in your medical records.

• Incorrect dates or lengths of stay: Verify the dates of any hospital stays listed on your medical bill. If you were admitted for a few hours but your bill incorrectly says you stayed overnight, you could incur significantly higher charges.

If you used health insurance, ask the company for an explanation of benefits and file a dispute if you believe your medical expenses should have been covered.

If you’re facing a large medical bill or dealing with a complex insurance issue, hiring a medical billing advocate may be worth the cost. A medical billing advocate is an independent professional who reviews medical bills to identify errors and overcharges, and who is trained to negotiate with insurance companies and healthcare providers.

Some hospitals and healthcare providers will allow you to set up a payment plan and pay off your bill in installments. If you’re able to set up a payment plan directly through the facility or provider, this is typically your best bet, as many charge little or no interest.

Aim to work out a payment plan directly with your provider, even if they suggest that you apply for medical financing through a third party. Owing your provider instead of a credit card company or lender lets you maintain the credit-reporting protections you get with medical bills, plus you could save on fees and interest.

You may be able to negotiate how much you owe for medical bills. For example, if you can afford to pay a portion of the bill in a lump sum, the doctor or hospital may agree to a discount.

You can also use tools like FAIRHealth’s cost estimator. If you find that you’re being charged significantly more than patients typically pay for a similar procedure in your area, use that information to negotiate a lower amount.

If you believe your insurance company should have covered a service, you might negotiate with your health provider for extra time to pay. Tell your provider that you’re disputing the bill with your insurer. You can file an internal appeal, where you ask your insurer to reconsider its decision, or an external appeal, where an independent third party makes the final decision about whether the insurance company must pay up.

Nonprofit hospitals are required under the Affordable Care Act to provide financial assistance programs to patients who can’t pay their medical bills. Depending on your state, some for-profit hospitals may also be obligated to offer charity care.

Hospitals are required to have a document called a Financial Assistance Policy (FAP) and provide it to you for free. You can ask for it upfront at the time you’re admitted.

Find out if you qualify for financial assistance before you agree to sign up for medical financing, such as a credit card or loan. The Consumer Financial Protection Bureau (CFPB) reports that many people who sign up for medical credit cards and loans are eligible for financial assistance under federal, state, or local law.

If you can’t work out a payment plan directly with your healthcare provider, one option is to pay for medical bills using a credit card.

Some credit cards, such as CareCredit, are medical credit cards that are designed specifically for healthcare, dental, and veterinary expenses. These credit cards often have temporary no-interest periods, but there are a few points of caution.

Medical credit cards frequently charge deferred interest, which means that you won’t pay interest if you pay off your balance in full before the end of the promotional period. But if you don’t pay the full bill by the end of the no-interest window, you’ll get hit with interest on the entire amount you financed instead of just the remaining balance.

For example, if you financed $1,000 and paid off $900 before the end of the promotional period, you’d owe interest on the full $1,000 you charged, instead of just the remaining $100. The standard annual percentage rate (APR) with these cards is often substantially higher than the average credit card APR.

Another option is to use a regular credit card to pay. Look for a card that has a long 0% intro APR so that you can pay off your medical debt before you’re charged interest. Some credit cards offer a 0% APR on new purchases for up to 21 months.

You can use a personal loan for pretty much any purpose, including medical bills. One advantage of personal loans vs. credit cards is that they typically have a lower interest rate, though some lenders tack on an origination fee and other charges.

Some lenders also work with providers to offer medical installment loans, also referred to as financing plans. As with medical credit cards, many medical installment loans charge deferred interest, so it’s essential to read the agreement carefully to avoid surprise interest charges.

When you don’t pay your medical bills, you can expect to receive past-due notices and phone calls from your healthcare provider. Eventually, they’ll probably send the account to collections. That typically won’t happen for 60 to 120 days, though, and providers may be flexible if you communicate with them.

Your provider can sue you over unpaid medical bills, as can debt collections agencies. It’s also possible that your provider will refuse future treatment if you’re delinquent, though hospital emergency rooms can’t turn you away over unpaid bills.

If an unpaid medical bill of less than $500 is sent to collections, it won’t affect your credit score. (Of course, you should still pay the bill if you know it’s legit and you can afford it.)

Medical bills in collections for amounts above $500 will appear on your credit reports if they’ve gone unpaid for a full year. Once the one-year grace period is up, these debts will appear on your credit reports, which could tank your credit scores. As with other accounts in collections, unpaid medical bills will stay on your credit reports for up to seven years.

However, if you pay off the bill or your insurer agrees to cover it, credit bureaus will remove that negative information once the debt is fully repaid. If your credit score plummeted due to having an account in collections, you’ll probably see it improve.

All of this is assuming, of course, that you owe a doctor’s office or hospital money, not a third-party lender. If you charged your bill to a credit card or took out a loan, you won’t be afforded a grace period or get a break on debts under $500; the debt will be treated the same as any other bills in collections on your credit reports.

If you’ve exhausted all of your options and are still reeling from medical costs, it may be time to pursue credit counseling. The National Foundation for Credit Counseling and the Financial Counseling Association of America both maintain lists of accredited, not-for-profit credit counseling agencies.

A credit counselor can help you determine how to best tackle your debt. Though they typically won’t negotiate how much you owe, they may be able to negotiate a lower payment on your behalf. If you don’t think you’ll ever be able to repay medical bills, you may need to discuss whether filing for bankruptcy makes sense for your situation.

Medical debt is almost never automatically forgiven, but many hospitals offer charity care for patients with financial hardship. With these programs, you may be able to qualify for a discount or have your bill forgiven.

There are usually a few ways to make payments on medical bills if you can’t pay them off in a lump sum. Some doctors, dentists, and hospitals will let you pay off your bills in installments. Medical credit cards, loans, and payment plans offered by third parties also let you break up your medical bills.

Medical bills under $500 can go to collections, but due to changes enacted in 2023 over how medical debt is reported, these accounts no longer appear on credit reports.

This article was edited by Alicia Hahn.