How to Pay Off Medical Debt: Payment Plans, Negotiation, Consolidation
Americans are used to taking on debt, whether in the form of a mortgage, car loan or home loan. But these types of debt are usually voluntary, meaning consumers choose to incur them to cover a specific expense.
A less voluntary type of debt is medical debt. Many people end up owing money on medical bills because they got sick or injured and they don’t have health insurance that fully covers their costs (or they don’t have health insurance at all). In fact, an estimated 41% of American adults have some type of debt caused by medical bills, according to a Kaiser Family Foundation Report.
Unfortunately, medical debt can be a huge burden in the same way that an expensive mortgage or auto loan can be. And as long as there is, fortunately, new protections in place to limit the impact of medical debt on consumer credit scores, medical debt remains a problem.
If you owe money for medical bills, you may want to get rid of that debt as quickly and painlessly as possible. Here are some steps you can take to make it happen.
1. Talk to your suppliers about setting up a reasonable payment plan
Many medical providers understand that healthcare expenses can come out of nowhere and leave patients unfairly overburdened. If you’re now sitting on a huge health care bill that you can’t pay, ask your provider to set up a payment plan that allows you to make reasonable payments based on your income. Often, providers work with patients who have a big bill to pay when their insurance doesn’t cover the bill (or they don’t have insurance to begin with).
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2. Try to negotiate your bills down
Maybe you’re stuck with a $15,000 hospital bill and you know it will take you years to pay it off based on your income. If so, talk to a manager and see if it’s possible to negotiate that amount down – say, down to $8,000. If you can prove that it will take you a long time to cover your entire bill, the establishment to which you owe money may negotiate to be paid something.
3. Consolidate your debts with a personal loan
A Personal loan can be an affordable way to consolidate and pay off debt. With a personal loan, you borrow a lump sum that you repay in installments at a fixed interest rate. You can use the proceeds of a personal loan for any purpose, including paying off medical debt. Often, personal loans come with competitive interest rates, more so than other loan products. And if you have good credit when you apply for a personal loan, you’ll have an even better chance of getting an affordable interest rate on the money you borrow.
In many cases, medical debt is unavoidable. But that doesn’t mean you have to resign yourself to letting it ruin your finances. Instead, take these steps to make that debt more manageable as you work to pay it off.
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