Have Medical Bills You Can’t Afford? Here’s How to Bargain Them Down

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how to pay medical bills you can't afford

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According to the Kaiser Family Foundation’s latest report on medical costs, 29 percent of adults in the U.S. struggle to pay their medical bills. Among this group, almost three-quarters report cutting back on simple household items — even food — to stay on top of these bills. More than a third increased their credit card debt as a result.

And those bills can have a direct effect on your health. A recent survey by healthcare transparency company Amino found 1 in 5 respondents avoid going to the doctor because of the potential cost.

Don’t let a fear of medical debt get in the way of your life. Here’s a guide to paying medical bills you can’t afford through the art of negotiation.

How to pay medical bills you can’t afford in five steps

You might think medical debt is the last thing you can negotiate. Getting medical treatment is not exactly like going to your local flea market, after all.

But you have more leverage to bargain than you might think. Here are a few tips to help you get started.

1. Review your medical bills

Before you get started with the negotiation process, review your medical bills. Carefully go over them the same way you’d review your credit card bill or bank statement. Keep an eye out for an explanation of benefits from your insurance company. Additionally, ask your medical provider for an itemized bill so you can see all the charges.

Review doctor or hospital visits you made, tests you took, and treatments you received to make sure everything lines up. It’s not unheard of for medical bills to contain errors.

In fact, the most recent data published by the American Medical Association shows 7.1 percent of medical bills paid contained errors.

How expensive can these errors be? Huffington Post recently reported “hospital bills totaling more than $10,000 contained an average error of $1,300,” according to an audit by credit rating agency Equifax.

If you’re not sure what you’re looking at when you review your bill, call your medical provider’s office and ask for clarification. You can also call your insurance company to question any expenses that weren’t covered. There’s a chance that they denied you coverage because of a technicality that could be overruled. The even may have denied coverage because of a loss of important information.

Let’s say you needed a referral to see a specialist to have that visit covered by insurance. If for some reason the insurance company didn’t know about the referral, they could charge you unfairly. That would be a charge to dispute with your insurance company, not your doctor.

Another thing to look for is surprise billing. For example, if you saw a doctor at an in-network facility, only to later find out the doctor was out-of-network. So you might have thought you were in the clear only to realize that there’s an extra charge not covered by your insurance company. Fighting this could be difficult, but you should at least know about it for next time.

Once you’re sure that all of the information on your medical bills is correct, you can move on to the next step of the process.

2. Talk to your medical provider about financial aid

The next step is to ask your medical provider if they offer assistance. For example, if the cause of your medical debt was a trip to the hospital, you might get part of your bill lopped off if your income falls within a certain range.

A colleague of mine, Claire Murdough, learned about this option during a scary financial time. When we met, she was working for my company as an intern and getting paid by the hour. Since she was not able to qualify for employer-sponsored insurance, and she had student loans to pay off, she took a risk. She opted not to buy a health insurance plan for herself. In her words:

“I had a choice to either pay the $300+ monthly premium or cross my fingers and hope my youth would be enough to keep me healthy. As you can probably guess, crossing my fingers didn’t work out for me. About six months into my ‘plan,’ I got a kidney infection which required me to go to the emergency room for treatment. It was terrifying.”

Murdough decided she had to negotiate the $7,000 bill she received for an IV, antibiotics, and tests. She contacted the hospital and found out she could talk to a financial advisor about her bill. Luckily, she went to the meeting prepared.

“The advisor looked at my bank statements and the paycheck stubs I brought in and said my income was within the bracket for a discounted bill. She asked that I verify a few things (by email and fax) and then was able to reduce the total cost by about 40 percent.”

Though the cost was still large, this reduction helped Murdough find some financial relief. So, what about you?

If you receive a huge medical bill, call your hospital. Ask to speak to the department that manages financial assistance. You can also Google those phrases with your hospital’s name to find the phone number directly.

Make sure to gather whatever paperwork the department says they’ll need from you. The more prepared you are, the easier this will be for you and the advisor trying to help you.

3. Compare the costs on your bill to those of other medical providers

If your income is too high to qualify you for financial assistance, there are other tools you can leverage to negotiate. One of these is to compare the costs of your medical care with those charged by other providers.

Websites such as Amino and Healthcare Bluebook enable you to research the cost of different medical procedures where you live. Not only can you use this in negotiations if your provider charged you more than others might have, but it can be a helpful step to take before future medical procedures. (Who knew you could price-shop for medical care?)

Although some doctor’s offices and hospitals might justify why their procedures cost more than at other facilities, this knowledge still gives you leverage to negotiate your bill down. The first person you speak to might tell you there’s nothing they can do, but be persistent. Continue to ask to speak with a higher-up until you have a substantial conversation about the amount they’re charging you.

According to Consumer Reports, once you’re talking to someone with authority, you can improve your chances by framing the conversation around what you can pay, your desire for a fair price, and your knowledge of the price insurance companies pay — especially if part of your care was done by out-of-network providers that you had no choice but to use.

4. Ask if you can get a prompt pay discount

If you have enough cash on hand to pay your medical bills, you can still try to negotiate them down by using something called a “prompt pay discount.” This is a discount some medical providers will give to collect on the bill quickly.

Given the fact that medical debt is the most common reason a debt collector might contact a consumer, it might not come as a surprise that medical providers want to incentivize fast payment.

U.S. News interviewed the founder of Medical Billing Advocates of America and Medical Recovery Services, Pat Palmer. She explained the prompt pay discount could get you 10 to 20 percent off your bill. But you should still check for errors on the bill first so your discount will be applied after you’ve negotiated the full price of the bill.

5. Request a payment plan

Finally, negotiate when and how you should repay your bill. Depending on the amount of the bill, paying it all at once could leave you financially strapped.

Ask your provider if they’ll set up an interest-free payment plan for you. Some might try to get you to sign up for a healthcare-specific credit card, but that’s not the same thing. What you want is an agreement with them in which you can pay a smaller amount in a set number of installments to eventually equal the total amount you owe.

Some hospitals might not just offer a payment plan, but a legitimate no-interest loan. NBC recently reported on this trend and shared the story of a man who was able to pay off a $2,800 bill in three years at only $80 per month. While he didn’t pay less than he owed, this loan made the amount due much more manageable.

And if they are willing to do this, get the agreement in writing. Otherwise, you could follow the plan you both set out on only to realize that your medical debt was sent over to a collections company.

Speaking of medical bills in collections…

What to do about medical bills in collections

Figuring out how to pay medical bills you can’t afford is one thing, but figuring out how to pay medical bills that have already gone to a collection agency is another story.

If you have medical bills in collections, it’s still a good idea to make sure you review your bills for errors and dispute them if they come up. But as for paying off the medical debt, here are a few tips to help.

  • Ask the debt collector for a payment plan. Since you might not be able to pay the debt in full right away, write out a budget to figure out how much you can afford to pay each month and then propose that plan to the debt collector; just be sure to get their agreement in writing.
  • See if you can settle for less than you owe. If you’ve saved a chunk of money that you can afford to pay upfront, offer that to them as a settlement to see if they’ll forgive the rest of the debt in an effort to get it paid off faster — remember, they didn’t pay full price for your debt so they might be willing to negotiate.
  • Consider the statute of limitations on debt. If several years have passed without you making payments on the debt, it might become “time-barred.” This means you still owe it, but you can use the statute of limitations on debt to defend yourself if you get sued for collections. Although debt collectors aren’t required to stop contacting you about the debt, they can’t successfully sue you for the money if the statute of limitations is up.

Take control of your health — and your medical bills

Medical bills can be terrifying, especially since it’s so hard to know in advance what the cost could amount to. But there’s no reason to fear. Remember that when it comes to medical debt, you do have options.

Follow the steps outlined above to empower yourself to negotiate a lower price or, at the very least, a fair payment plan.

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LenderAPR RangeLoan Amount 
1 Includes AutoPay discount. Important Disclosures for SoFi.

SoFi Disclosures

  1. Fixed rates from 5.990% APR to 16.240% APR (with AutoPay). Variable rates from 5.75% APR to 14.60% APR (with AutoPay). SoFi rate ranges are current as of March 18, 2019 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. See APR examples and terms. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 5.75% APR assumes current 1-month LIBOR rate of 2.50% plus 4.28% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.
  2. To check the rates and terms you qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull.
    See Consumer Licenses.
  3. Minimum Credit Score: Not all applicants who meet SoFi’s minimum credit score requirements are approved for a personal loan. In addition to meeting SoFi’s minimum eligibility criteria, applicants must also meet other credit and underwriting requirements to qualify.
  4. SoFi Personal Loans are not available to residents of MS. Maximum interest rate on loans for residents of AK and WY is 9.99% APR, for residents of IL with loans over $40,000 is 8.99% APR, for residents of TX is 9.99% APR on terms greater than 5 years, for residents of CO, CT, HI, VA, SC is 11.99% APR, and for residents of ME is 12.24% APR. Personal loans not available to residents of MI who already have a student loan with SoFi. Personal Loans minimum loan amount is $5,000. Residents of AZ, MA, and NH have a minimum loan amount of $10,001. Residents of KY have a minimum loan amount of $15,001. Residents of PA have a minimum loan amount of $25,001. Variable rates not available to residents of AK, TX, VA, WY, or for residents of IL for loans greater than $40,000.
  5. If you lose your job through no fault of your own, you may apply for Unemployment Protection. SoFi will suspend your monthly SoFi loan payments and provide job placement assistance during your forbearance period. Interest will continue to accrue and will be added to your principal balance at the end of each forbearance period, to the extent permitted by applicable law. Benefits are offered in three month increments, and capped at 12 months, in aggregate, over the life of the loan. To be eligible for this assistance you must provide proof that you have applied for and are eligible for unemployment compensation, and you must actively work with our Career Advisory Group to look for new employment. If the loan is co-signed the unemployment protection applies where both the borrower and cosigner lose their job and meet conditions.
  6. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)

2 Includes AutoPay discount. Important Disclosures for Payoff.

Payoff Disclosures

  1. All loans are subject to credit review and approval. Your actual rate depends upon credit score, loan amount, loan term, credit usage and history. Currently loans are not offered in: MA, MS, NE, NV, OH, and WV.

3 Important Disclosures for FreedomPlus.

FreedomPlus Disclosures

  1. All loans available through FreedomPlus.com are made by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender. All loan and rate terms are subject to eligibility restrictions, application review, credit score, loan amount, loan term, lender approval, and credit usage and history. Eligibility for a loan is not guaranteed. Loans are not available to residents of all states – please call a FreedomPlus representative for further details. The following limitations, in addition to others, shall apply: FreedomPlus does not arrange loans in: (i) Arizona under $10,500; (ii) Massachusetts under $6,500, (iii) Ohio under $5,500, and (iv) Georgia under $3,500. Repayment periods range from 24 to 60 months. The range of APRs on loans made available through FreedomPlus is 5.99% to a maximum of 29.99%. APR. The APR calculation includes all applicable fees, including the loan origination fee. For Example, a four year $20,000 loan with an interest rate of 15.49% and corresponding APR of 18.34% would have an estimated monthly payment of $561.60 and a total cost payable of $7,948.13. To qualify for a 5.99% APR loan, a borrower will need excellent credit on a loan for an amount less than $12,000.00, and with a term equal to 24 months. Adding a co-borrower with sufficient income; using at least eighty-five percent (85%) of the loan proceeds to directly pay off qualifying existing debt; or showing proof of sufficient retirement savings, could help you also qualify for the lowest rate available.

4 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Personal Loan Rate DisclosureFixed interest rates from 6.79% – 20.89% (6.79% – 20.89% APR) based on applicable terms. Lowest rates range from 5.99%-18.99% (5.99%-18.99% APR), are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment Discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  2. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with us at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  3. Automatic Payment Discount: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount.

5 Important Disclosures for LendingPoint.

LendingPoint Disclosures

  • Loan approval is not guaranteed. Actual loan offers and loan amounts, terms and annual percentage rates (“APR”) may vary based upon LendingPoint’s proprietary scoring and underwriting system’s review of your credit, financial condition, other factors, and supporting documents or information you provide. Origination or other fees from 0% to 6% may apply depending upon your state of residence. Upon LendingPoint’s final underwriting approval to fund a loan, said funds are often sent via ACH the next non-holiday business day. LendingPoint makes loan offers from $2,000 to $25,000, at rates ranging from a low of 9.99% APR to a high of 35.99% APR, with terms from 24 to 48 months. The loan offer(s) shown reflect a 28 day payment cycle which is being offered as a courtesy as many of our customers are paid on a biweekly schedule and thus this may better align the loan payment dates with your actual income receipt schedule.

6 Important Disclosures for LendingClub.

LendingClub Disclosures

All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.95% to 35.89%*. The origination fee ranges from 1% to 6% of the original principal balance and is deducted from your loan proceeds. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at the time of application. The average origination fee is 5.49% as of Q1 2017. In Georgia, the minimum loan amount is $3,025. In Massachusetts, the minimum loan amount is $6,025 if your APR is greater than 12%. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months. Borrower must be a U.S. citizen, permanent resident or be in the United States on a valid long term visa and at least 18 years old. Valid bank account and Social Security number are required. Equal Housing Lender. All loans are subject to credit approval. LendingClub’s physical address is: LendingClub, 71 Stevenson Street, Suite 1000, San Francisco, CA 94105.

†Per reviews collected and authenticated by Bazaarvoice in compliance with the Bazaarvoice Authentication Requirements, supported by anti-fraud technology and human analysis. All reviews can be reviewed at reviews.lendingclub.com

**Based on approximately 60% of borrowers who received offers through LendingClub’s marketing partners between January 1, 2018 to July 20,2018. The time it will take to fund your loan may vary.

7 Important Disclosures for Earnest.

Earnest Disclosures

  1. Earnest does not lend in Alabama, Delaware, Kentucky, Nevada, or Rhode Island.

8 Important Disclosures for Avant.

Avant Disclosures

* The actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. Funds are generally deposited via ACH for delivery next business day if approved by 4:30pm CT Monday-Friday. Avant branded credit products are issued by WebBank, member FDIC.

** Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33

* Important Disclosures for Upgrade Bank.

Upgrade Bank Disclosures

* Your loan terms are not guaranteed and are subject to our verification and review process. You may be asked to provide additional documents to enable us to verify your income and your identity. This rate includes an Autopay APR reduction of 0.5%. By enrolling in Autopay your payments will be automatically deducted from you bank account. Selecting Autopay is optional. Annual Percentage Rate is inclusive of a loan origination fee, which is deducted from the loan proceeds. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. All loans made by WebBank, member FDIC. Please refer to Upgrade’s Terms of Use and Borrower Agreement for all terms, conditions and requirements.

** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.

5.75% – 16.24%1$5,000 - $100,000

Visit SoFi

7.46% – 35.99%$1,000 - $50,000

Visit Upstart

7.99% – 35.89%*$1,000 - $50,000

Visit Upgrade

5.99% – 24.99%2$5,000 - $35,000

Visit Payoff

5.99% – 29.99%3$7,500 - $40,000

Visit FreedomPlus

6.79% – 20.89%4$5,000 - $50,000

Visit Citizens

9.99% – 35.99%5$2,000 - $25,000

Visit LendingPoint

6.95% – 35.89%6$1,000 - $40,000

Visit LendingClub

6.99% – 18.24%7$5,000 - $75,000

Visit Earnest

9.95% – 35.99%8$2,000 - $35,000

Visit Avant

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time.

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