How to Deal With Medical Debt Collection

What to Do About Unpaid Medical Bills

A 2019 study found that 137.1 million adults had experienced medical financial hardship in the past year. Needless to say, medical debt is a serious issue in the United States. Medical bills are quite serious and can cripple your finances. Hopefully, you can deal with your medical debt before it pushes you to bankruptcy.

Don't Ignore the Bills

A stethoscope sits atop an outstanding medical bill
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Burying your head in the sand won’t make the bills go away. In fact, it could make the situation worse. Doctors and other medical providers will only collect on your account for a few months before they send the account to a collection agency.

At that point, the medical bill goes on your credit report and hurts your future chances of borrowing money, e.g. for a house. You can also be sued for the debt, which could result in a judgment, bank levy, or wage garnishment.

Make Sure You Have a Bill, Not an Explanation of Benefits

Stressed man sitting at table looking at medical bills.
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Read through the mail to make sure you actually have a balance due. Sometimes the health insurance company sends an explanation of benefits to explain what’s been paid on your behalf. The EOB can actually give you a heads up to medical bills that are on their way. If the EOB shows the insurance company only paid part of the claim, you can expect the doctor's office to send a bill soon.

Verify the Item Isn't Covered By Insurance

Woman looking through medical bills at her computer.
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Medical billing is complex and mistakes can happen. Make sure your doctor’s office billed the insurance company for the right services and follow up with the insurance company to figure out why the bill wasn’t paid. Being proactive in clearing up mistakes can save you thousands of dollars.


Man gesturing with his hands while negotiating a deal with creditors.
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You may be surprised to learn that medical service providers have pricing structures that vary so much, they are nearly random. If you're being charged $1,200 for a few bandages, you can argue with them about it.

The medical industry counts on you not understanding what you are being billed for and they use it against you. If insurance won't pay for it, then you may not want to either. 

Call them up and tell them you might not be able to pay them at all if they can't work with you. You won't have to argue with your doctor about it, you'll be talking to a billing clerk.

If you aren't healthy enough or feel uncomfortable negotiating, search online for companies that will do the negotiating for you. 

Pay It Off

a woman looking stressed sitting in front of a laptop with a stack of medical bills in front of her
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You may be able to pay medical bills, especially small ones, in a lump-sum if you have the money in a savings account or emergency fund. Just write a check and mail it to the billing address listed on your bill. Make sure you write the account number on the check so you don’t keep getting billed. If you’re not paying the balance in full, call the doctor’s office to set up payment arrangements before the debt is sent to a collection agency.

Make Payment Arrangements

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Contact your doctor’s office if you're not paying your bill in full immediately even if you plan to follow up with the insurance company, so the billing department is aware that you’re not just ignoring the bill. If you are responsible for the balance, ask for a payment plan. Make sure you review your budget to figure out what you can afford. As with any other bill, make your payments on time each month. Otherwise, your account may be sent to a collection agency despite your previous payments.

Pay Your Child's Medical Bills — You're Responsible

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Don’t ignore bills from your child’s doctor or emergency room visit. Among the forms you signed was an agreement to pay for any of your child’s medical expenses that weren’t covered by health insurance. If you don’t pay the bill, it will hurt your credit the same as if it were your own medical bill. 

Find Out If You Qualify for Medicaid

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Medicaid is health insurance for low-income residents who can’t afford their medical care expenses. Qualification criteria vary by state, so you must contact your state Medicaid office to find out if you qualify. (Your child may be eligible for Medicaid even if you are not.) If you qualify, Medicaid can be used to pay for medical expenses you’ve already incurred, but only within a certain time frame, so apply as soon as possible after receiving a medical bill.

Put the Medical Bill on a Credit Card

Man using a credit card to pay a medical bill on his laptop.
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It’s not the ideal solution, but when all else fails, you can put the medical bill on your credit card to keep it from being sent to a collection agency. Pick your own credit card, though, based on interest rate, available credit, and other features. Don’t sign up for medical credit cards or loans offered through your physician’s office without comparing to other credit card options.

File for Bankruptcy

Woman paying medical bills while sitting on her couch.
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In the absence of any other solution, you may have to get help through bankruptcy court. Medical debt can be completely discharged if you qualify for Chapter 7 bankruptcy or you can pay it over three to five years through a Chapter 13 repayment plan. Bankruptcy may be the least desired solution, but it’s better than struggling to make ends meet while making payments on medical debt that may never be paid.

Deal With Medical Debt Collections

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If the bill is already with a collection agency, you can follow most of these same steps. You can also send a cease and desist letter to the collection agency if you want them to stop contacting you about the debt. Be aware that a collection agency ​also has the right to report a debt on your credit report, sue you, and garnish your wages (with the court’s permission).