Medical Debt and Financing Options: Ways to Deal with Medical Costs

piggy bank with medical debt and loans concept
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Managing medical costs through various financing options and how to compare them to avoid having your health costs spin or of control. Whether you already have a stack of medical bills piled up, or you have procedures coming up, or a medical situation where you foresee not being able to cover the bills easily, there are many options to help manage medical debt, here are some details on financing options and strategies to help you manage your medical bills and debt.

Did you know that one out of five Americans has problems paying medical bills? If you are worried about paying medical expenses and how to manage medical debt, you are not alone.

Options to Finance Medical Bills

Medical bankruptcy is a serious problem for many people who suddenly get hit with unexpected medical costs and illness. Although a good health insurance plan will often help with medical bills, there are times where even if you have health insurance you may have to pay parts of your medical bills and the costs can be overwhelming.

Medical Credit Cards

Many doctors, dentists, clinics and hospitals may accept medical credit cards and often have applications in office. You can also check online for a large variety of medical credit cards you may be eligible for. Medical credit cards can be used for medical procedures, and their interest rate varies greatly. Some medical credit cards offer 6-12 month interest free payments, which are a good option if you think you can pay off the debt in the interest-free timeline.

Credit cards are a great way to get a pending bill off your hands quickly, but understanding how long it will take to pay off that debt and the impact of the interest rate will help you determine if this solution is the best idea for you. Debt repayment calculators can help you understand how the interest rate and payments you can make will impact you and how long it will take to pay off a debt.

Payment Plans

Speaking to the billing representative or financial counselor at your doctors office or the point of service where you will get care can be more helpful than you think in finding solutions and various payment plans for your situation. Not only can these people provide information on how their payment options work, but they may have additional information on prompt-pay discounts, and other financing options.

Always try and negotiate your payments, and ask if the rate you are paying is the best rate they have available.

Interest Free-Payment Plans and Discounts for Medical Bills

Sometimes it may be tempting to try and pay off your medical debt using loans or credit cards, but if you are looking at specific costs or bills, check the small print of your medical bill because sometimes the payment terms offered by your doctor or clinic may offer interest free payments.

Prompt-Pay Discounts for Medical Bills

Some medical offices will also give you discounts when you pay the full amount within 30 days, this option may not be realistic for larger bills, but any time you can save money on your costs, it is worth finding out about. For example, if you get 10 percent off for paying your bill within 30 days on a number of small procedures, that 10 percent will add up quickly and allow you to put that money into a larger bill.

Medical Loans and Medical Debt Reconciliation

Medical loans are a common option for people to consider when looking at financing upcoming procedures, or medical bills. When you are looking at medical loans it is really important to look at the interest rates you will be paying (there are some with low interest, and some with interest that goes over 30 percent!) Learn more in our article "Should You Get a Medical Loan"

Health Savings Accounts (HSA)

Having a high deductible health insurance plan may sound like a scary idea when you are looking at medical costs, but consider the advantages and money you save with an HSA. Although an HSA is not a "loan", if you will be having medical expenses and you haven't explored what your options are with an HSA, you should. There are many advantages with using HSA's, including tax benefits. Learn more about how an HSA works, choosing the best HSA and the advantages you will get by using an HSA to pay your medical bills.

Collection Agencies and Unpaid Medical Debt

You may be in a situation where you were not able to pay your medical bills and now they are in collection. There are several strategies you can use to make deals with collection agencies to handle the debt, and payment plans. Our article on Tactics to Deal With Unpaid Medical Debt may help.

Grants and Financial Assistance From Outside Resources Like the Patient Advocate Foundation

When you or someone in your family is sick or dealing with illness it is an extremely draining process. Dealing with medical bills is overwhelming and depending on what you are dealing with medically, there may be times where even with the best intentions it is hard to deal with medical bills when you are fighting for your health. Organizations, such as the Patient Advocate Foundation are an excellent resource to help you get organized, get advice, financial assistance or even get help with medical billing.

As an example, they also offer financial aid funds, co-pay relief programs. Look into organizations like them, or local community organizations who help in these situations. Learn more about the PAF and how they can help here.