What to Do When You Can’t Pay

Unpaid medical bills can be financially and emotionally overwhelming. With rising healthcare costs and insurance plans that don’t always cover everything, millions of Americans are currently in medical debt.

Whether it’s a surprise emergency room visit or a long-term treatment plan, knowing how to handle medical bills proactively can help protect your finances and your peace of mind. These steps can help reduce the burden and avoid long-term damage to your credit.

Understanding Your Medical Bill

Before paying anything, it’s necessary to understand what you’re being charged for. Medical bills can contain errors, duplicate charges, or misapplied insurance payments.

You should always request an itemized bill to spot errors or duplicate charges, says Aaron Leak, founder of ECL Private Wealth Management, adding that you should compare it with your insurance explanation of benefits (EOB) to confirm what was covered and what you may still owe.

Also, check that the bill actually belongs to you and corresponds to the services you received. Leak suggests contacting the billing department to confirm it’s accurate and yours. If something seems off, request clarification in writing before making any payments.

Determining Your Responsibility

Once you’ve reviewed your bill and compared it against your insurance coverage, take time to understand your financial responsibility. This includes verifying deductible status, co-insurance, and whether any out-of-network charges were incorrectly applied. If your insurance was supposed to cover something that hasn’t been paid, follow up directly with your provider to resolve discrepancies.

You may also want to review the insurer’s denial codes or appeal options. Medical billing departments can make mistakes, and insurers sometimes reverse denials upon request.

Exploring Financial Assistance Options

Hospitals and nonprofit healthcare providers often have programs to help patients who can’t afford their bills. Apply for hospital financial assistance or charity care, Leak advises. These programs are typically based on income and family size, and some offer retroactive aid if you qualify after the bill is issued.

You can also research community and nonprofit resources. For example, organizations like Undue Medical Debt buy and forgive outstanding balances for qualifying individuals. Additionally, depending on your state and situation, you might be eligible for retroactive Medicaid coverage—especially if the treatment occurred during a time of financial hardship.

Legal Protections and Rights

If you get a bill from an out-of-network emergency room or a provider who you thought was covered, you may be protected by the No Surprises Act. This federal law was designed to limit unexpected charges for certain medical services. It prohibits surprise billing for emergency care and some non-emergency care at in-network hospitals, regardless of your insurance plan.

You also have rights under the Fair Debt Collection Practices Act (FDCPA) if your medical bills go to collections, including protections against harassment and the ability to dispute inaccurate charges.

Negotiating With Healthcare Providers

If you’re not yet in collections, contact the billing office to discuss your options. “Call early to negotiate discounts or set up a payment plan,” Leak recommends.

Some providers offer prompt-pay or cash-pay discounts that can significantly reduce your bill. And no matter what agreement you reach, “always get agreements in writing,” Leak says. This protects you in case of billing errors or disputes later on.

Dealing With Debt Collectors

If your medical bill has already been sent to collections, you still have rights—and negotiating power. Leak recommends you request written verification of the debt to ensure the charges are legitimate. If there are errors, dispute any errors with the collector and credit bureaus.

It may also be possible to settle the debt for less than the full amount. But again, make sure any agreement is documented before making a payment. This will help protect your credit and avoid misunderstandings.

Impact on Credit Scores

Medical debt doesn’t affect your credit the way it used to. Thanks to recent policy changes impacting the major credit bureaus:

• Paid medical collections no longer appear on credit reports.
• There’s a one-year grace period before unpaid medical bills are reported.
• Debts under $500 are no longer shown at all.

Still, larger unpaid debts can lower your credit score, so acting quickly is key. “Larger unpaid debts can still hurt your score, so act fast,” Leak warns. The longer the debt lingers, the more difficult it may be to negotiate or resolve.

The Bottom Line

Medical debt can be stressful, but you’re not powerless. If you’re struggling with medical debt, always review your bills for errors, explore financial aid, understand your rights, and communicate early with providers and collectors. This way, you can avoid the worst financial outcomes and regain control of your situation.