How to Get Rid of Medical Bills If You Can’t Pay: Debt Relief and Other Options

Like over 100 million Americans, you may be struggling with medical debt that can seem impossible to pay off. In response to this crisis, the U.S. Congress introduced the Medical Debt Relief Act in 2023. If passed, the act would prohibit consumer reporting agencies from including medical debt on credit reports. Several states have also provided medical debt relief.

For example, in 2024, Illinois established a medical debt relief program with grant funding to help residents with medical debt. The same year, Connecticut established a plan to cancel medical debt for around 250,000 residents. Here, you’ll learn why it’s important to understand your options for medical debt relief and where to get help paying off medical debt.

Medical debt in America: Statistics

Medical debt can create a financial burden that keeps people from buying their first home, attending college, having kids, or pursuing other life goals. If you’re burdened with medical debt, you’re not alone, according to the statistics below.

How much medical debt exists in the U.S. in 2024? 

In 2024, Americans owed an estimated $220 billion in medical debt, according to the Federal Register. About 14 million people owed more than $1,000, 3 million owed between $5,000 and $10,000, and another 3 million owed more than $10,000, according to the same source. 

Around 23% of American adults reported they had unexpected medical expenses in 2023, with the median amount of medical debt ranging from $1,000 to $2,000 per person. In addition, 27% of those surveyed said they didn’t go to the doctor or hospital when they needed medical care because they worried about being unable to pay the medical bills.

Medical debt in the U.S. during the COVID-19 pandemic declined. This may be due to a decrease in elective medical procedures, laws partially protecting consumers from COVID-19 medical costs, and government funding for Medicaid and the Health Insurance Marketplace.

In 2024, medical care costs slightly outpaced the inflation rate for other aspects of the economy, according to a report from Peterson-KFF. Even though 92% of Americans had health insurance coverage in 2023, more than 26 million Americans went without coverage, according to the U.S. Census Bureau.

What happens if you don’t pay medical debt? 

If you have a stack of medical bills you can’t pay, you may be worried about what will happen if you can’t pay them off. Will unpaid medical debt hurt your credit? What happens if the creditor sends your medical debt to collections? Below you’ll find answers to these questions and more.

Does medical debt go away on its own?

Your medical debt won’t just go away on its own. If you can’t pay the hospital, doctor’s office, or another healthcare provider, and the debt exceeds $500, the office may sell your medical debt to a collection agency and/or report your default to major credit bureaus. 

When that happens, the collection agency may aggressively pursue what you owe, or creditors may sue you for the debt amount.

Does medical debt go to collections?

The hospital, doctor, or another healthcare provider may send your unpaid medical debt of more than $500 to collections after 60 to 120 days. When medical debt goes to collections, any unpaid amount will likely appear on your credit report, which can appear for up to seven years. 

However, the three major credit bureaus won’t list the debt on your credit report until at least one year after you see a healthcare provider.

Does medical debt affect your credit score?

If creditors report your medical debt, that will likely affect your credit negatively. That’s because payment history makes up about 30% of your FICO score. However, the past-due account won’t haunt your credit forever. Like other past-due accounts, medical debt reported to credit bureaus will automatically drop off your credit report after seven years. 

This may change in the near future if the Medical Debt Relief Act becomes law. If that happens,  consumer reporting agencies—including the three major credit bureaus—would be prohibited from reporting any medical debt on your credit report. 

If you’re dealing with medical debt, the first thing to do is to reach out to the provider. They are often accommodating in helping you create a payment plan that works for you.

Catherine Valega, CFP®

How to handle unpaid medical debt

When it comes to handling unpaid medical debt, below are tips for making sure your medical bills are accurate and organized and strategies for negotiating a settlement for a lower amount or setting up payment plans.

Tips to review and manage bills

1. Check for billing errors.

Did you know that around 80% of all medical bills contain errors? It’s important to compare the explanation of benefits (EOB) sent by your health plan insurer against the amount billed by your healthcare provider. 

One reason is that the EOB and the medical bill may cross in the mail, resulting in the healthcare provider overbilling.

2. Don’t pay until you receive the bill

The EOB isn’t a bill. It explains the provider, services received, the amount your health plan is responsible for, and the amount you may owe. Review the EOB to ensure the date of service, provider, and services received are correct.

Never pay the provider based on the EOB. Wait until you receive the provider bill and compare the amount billed with the amount you will owe stated on the EOB. If the provider bill is higher, contact the health provider’s billing department to discuss and/or dispute the discrepancy.

3. Organize all bills and EOBs

Keep electronic or hardcopy files for all your medical bills, organizing paid and unpaid bills separately, such as in a notebook with folders or an accordion file. Also, keep a separate file for EOBs. That way, you’ll have all the information handy when you receive bills or past-due statements from healthcare providers.

4. Consider hiring a medical billing advocate

If your medical bills are overwhelming or your health insurer refuses to pay claims, you may want to hire a medical billing advocate. These professionals, who charge by the hour or by a percentage of how much you save, deal with insurance companies, file appeals, and deal with billing errors regularly.

How to negotiate and get payment plans with providers

You may be able to set up payment plans with your healthcare providers or negotiate to lower your medical debt significantly. To set up a payment plan, gather all your medical bills from the provider and contact the billing department. The hospital or healthcare provider may allow you to make affordable monthly payments without paying interest to avoid collections.

When you’re signed up for a payment plan, it’s important to make all payments on time. Otherwise, the creditor could cancel the plan and demand full payment immediately. Another option is negotiating a settlement for an amount lower than what you owe. If you want to negotiate, make sure you have a reasonable settlement amount in mind before you contact the billing office. 

For example, if your hospital ER bill is $6,000, an offer of a $1,000 lump sum will likely be rejected. On the other hand, try offering $4,000, or even $3,000, paid in a lump sum with a credit card. The billing department wants that bill off their plate as much as you do. If the hospital accepts your offer, you’ll save at least $2,000. However, make sure you can pay off the credit card balance as quickly as possible before accruing more interest than you save.

When I help clients prioritize medical debt vs. other types of debt, we look at how much income they have to allocate to debt after paying for basic needs, such as food, housing, and transportation. We create payment plans when possible. 

We also explore other avenues of accessing additional funds—for example, a hardship withdrawal from a 401(k), a home equity line of credit, or possibly borrowing funds from a willing family member.

Also, given the high healthcare costs, I like it when clients can fund an HSA (health savings account) when they have a high-deductible medical plan. Employers often also help fund those accounts. Ideally, we let them accumulate for use in retirement, but if you must use them now, that is a better source of funds than accumulating medical debt.

Catherine Valega, CFP®

How to get help paying your medical debt 

The Medical Debt Relief Act was introduced in the House in 2023 and is still being reviewed. If the bill (HR 6003) moves forward, it must still pass the House and the Senate before becoming law. Should the Medical Debt Relief Act become law, it would prohibit the inclusion of medical debt on a consumer report, including a credit report.

The second part of the Medical Debt Relief Act would prohibit creditors from obtaining or using a consumer’s medical debt information when considering extending credit to that person.

Meanwhile, several states have passed legislation or approved state programs to ease the burden of medical debt on consumers. The table below details medical debt relief programs for four states.

Government debt relief programs and charitable support

Charities and nonprofits may also offer debt relief support. For example, Undue Medical Debt  (formerly RIP Medical Debt) is a national charitable organization that buys large portfolios of consumer medical debt. The organization then pays off the medical debt of select recipients who earn 4x below the poverty level or whose medical debt exceeds 5% of their annual income.

Once an eligible consumer’s debt is paid by Undue Medical Debt, they’ll receive a surprise letter notifying them that their medical debt is now erased. 

Other nonprofits and charitable organizations that offer help with medical debt include:

• Dollar For is a national nonprofit that helps consumers access charity care at hospitals where they owe medical debt. Charity care comes in the form of bill forgiveness or discounts offered at most nonprofit hospitals. For example, with charity care, a $10,000 hospital bill might become $200, or even $0 after charity care kicks in.

• Health Consumer Alliance connects California residents with nonprofit legal services organizations throughout the state that offer free assistance with understanding and navigating medical debt and health insurance.
• UCI Health is a California state program that reviews hospitals’ financial assistance decisions and denials for charity care.

• Nonprofit credit counseling agencies provide free credit counseling or charge a small fee. A credit counselor can help you create a medical debt management plan. The credit counselor typically sets up a payment schedule agreed upon by you and your creditors. 

From there, you pay the nonprofit credit counseling agency one monthly payment. Using that payment amount, the counselor makes payments on your unpaid medical bills until they are paid off. For a directory of nonprofit credit counseling agencies, visit the National Foundation for Credit Counseling.

At some debt relief support organizations, you may have to meet income eligibility or other requirements to receive services or assistance.

Debt relief companies

Debt relief companies may be an option for those with thousands in medical debt. When you sign up for a debt relief program with a debt relief company, you send the company a monthly payment you can afford. The money is deposited into an escrow account until there is enough to negotiate with your creditors to settle for a lower amount.

However, there are risks to this method of debt relief. Debt relief companies generally don’t guarantee that they can negotiate for lower debt payoff amounts. Your credit score will also drop as you must stop paying creditors while growing funds in the escrow account. You’ll also pay a fee to the debt relief company for settling your medical debts.

National Debt Relief is LendEDU’s highest rated debt relief company, listed in the table below. View all of our recommendations for the best debt relief companies.

Alternatives to debt relief programs 

Due to the risks of no guaranteed settlements and hurting your credit when using a debt relief program, you may want to explore alternatives like the ones below.

Negotiate a medical debt settlement with creditors

Try negotiating with creditors before paying a debt relief company to do it for you. Prepare for your call to the hospital or another healthcare provider’s billing department by gathering your medical bills. 

Come up with a reasonable settlement amount you can pay in a lump sum. You may be able to charge the amount on a credit card with 0% intro APR for a year or longer while you pay off the card without paying interest.

File for bankruptcy

If your medical debt is overwhelming, filing for bankruptcy may be an option. However, bankruptcy should be a last resort as it will stay on your credit report for up to 10 years, damaging your credit.

Explore state-specific resources

Some states offer medical debt relief or help navigating medical bills and insurance, including the resources below:

• Arizona: Up to 2 billion dollars in medical debt forgiveness for Arizona residents.
• Illinois: Up to $1 billion in medical debt relief for Illinois residents.
• Connecticut: Cancel up to $2 billion in medical debt for Connecticut residents.
• New Jersey: Cancel up to $120 million in medical debt for New Jersey residents.

Visit this White House fact sheet for additional city and county medical debt relief programs 

FAQ

What is the Medical Debt Relief Act of 2023?

The Medical Debt Relief Act of 2023 is proposed legislation that relieves consumers from the long-term financial impact of medical debt. Provisions include barring credit reporting agencies from including medical debt under $500 on credit reports and requiring the removal of paid or settled medical debt from credit histories within a year.

The goal is to reduce the financial and credit damage caused by medical expenses, particularly for individuals with limited means to pay. While the act helps improve credit reporting practices, it doesn’t eliminate debt itself. Consumers must still explore payment plans, relief programs, or settlements to address unpaid medical bills.

How do I get rid of medical debt?

Getting rid of medical debt typically involves a combination of negotiation, relief programs, and repayment strategies. Start by reviewing your medical bills for errors and disputing incorrect charges. Next, contact your healthcare provider to negotiate a reduced amount or set up an affordable payment plan.

If those options don’t suffice, explore medical debt relief programs or charities that may forgive your balance. For significant debts, you might consider working with a debt relief company to negotiate settlements or filing for bankruptcy as a last resort.

Can I get my medical bills forgiven?

Medical bill forgiveness is possible under certain circumstances, often depending on your financial situation and the policies of your healthcare provider. Many hospitals and clinics offer charity care or financial assistance programs, which may forgive a portion or all of your bills if you meet income and eligibility criteria.

Organizations such as RIP Medical Debt focus on forgiving medical debts for qualifying individuals. Contact your provider to ask about forgiveness options, and be prepared to provide proof of financial hardship if required.

What happens if I can’t pay for surgery?

If you can’t pay for surgery, discuss financial assistance options with the hospital or provider in advance. Many hospitals offer charity care programs, payment plans, or financing options to help patients afford essential procedures. Some providers may also accept partial payment upfront or negotiate a reduced cost.

Failing to pay could result in the bill being sent to collections, harming your credit. To avoid this, explore other options such as state-specific programs, nonprofit assistance, or loans if necessary. Communicating with the provider is key to finding a manageable solution.

Can I ignore medical bills?

Ignoring medical bills can lead to serious financial consequences. Unpaid medical bills may be sent to collections, damaging your credit score and making it harder to secure loans or housing. Persistent nonpayment could also result in legal action, including wage garnishment in some cases.

Instead of ignoring bills, communicate with your provider to negotiate payments or seek assistance through financial aid programs or debt relief services. Addressing the debt proactively can help you avoid further complications.

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