Managing medical debt

Keep your finances healthy by limiting medical debt

Medical debt is a problem that hurts the financial health of many Americans.

The Consumer Financial Protection Bureau said that one out of five credit reports contains overdue medical debt.

That means roughly 43 million Americans have medical debt that is hurting their credit report.

Medical debt can befall people at their most vulnerable point, but we’ve collected tips on how to keep it from crippling you.

1 Document

Check your bill and make sure the details match up with your treatment. If there is a discrepancy between what is billed and what your insurer covers, raise the issue with both your medical provider and an insurer to be certain you’re receiving proper coverage. If necessary, appeal or dispute the case. Keep an organized record of all bills and correspondence.

2 Verify

If you have a major medical event coming up, such as surgery, check with your insurer beforehand to find out what costs you’ll be responsible for. It’s also a good time to make sure your insurance information is up to date and accurate. CFPB says that a small mix-up can lead to big bills for expenses that should have been covered.

3 Act

If you are billed for medical care, resolve it right away. If you don’t owe the money, act quickly to dispute it. If you are responsible, pay it as soon as possible. The CFPB reminds consumers that if you delay paying the bill and let it end up in collections, it can damage your credit score.

4 Negotiate

Hospitals are often willing to negotiate the amount of the bill with you. CFPB says that the tab may be reduced if you pay the balance up front. A hospital may also offer a plan that enables you to pay off the debt in installments at no interest. And if you are low income, you may be eligible for charity care or other assistance.

5 Avoid credit

Do not put a payment on your credit card if you aren’t able to pay off the balance immediately. Doing so will add high interest expenses to your bill, as well as making the expense appear as a regular debt to creditors. Instead look into a low- or no-interest payment plan through your provider or seek other alternatives.