Finding your way through medical debt: A path to financial wellness

When you or someone you care about is sick or hurt, you think about treatment first and costs later. You tell yourself you'll sort out the medical bills later—for now, the focus is on recovery.

We've all been there. Health insurance can help, but it doesn't cover everything, and many Americans have no insurance at all. In those situations, many people have to use their credit cards to pay for care. 

Medical debt isn't the end of the world, but it won't go away by itself. We've got some tips for how to manage credit card debt after medical expenses add up.

What are the first steps to take when you're facing big medical expenses?

Unexpected expenses like medical bills can throw you for a loop. So what you need is a plan for what to do next. 

• First, breathe. The best way to approach medical debt is with a clear head. So stop, take a breath, and remind yourself that this is a situation you can deal with. 

• Review all medical bills for errors or overcharges. Medical bill errors are more common than you might think. A 2024 study found that 45% of insured, working-age adults had received at least one bill with an error in the past year. Incorrectly billed amounts, charges for services you didn't receive, and double charges for the same service are some of the most common medical bill mistakes. If you find any of these errors on your bills, you have the right to challenge them and get the bill corrected. 

• Contact your insurer to find out how to request more coverage. A condition that requires ongoing treatment could justify more coverage. That could mean fewer medical bills for you. You could ask to change your plan during open enrollment. If you have a claim that's denied, you could appeal it or ask for a letter of medical necessity from your doctor to get your treatment approved. 

• Contact providers to negotiate amounts or payment plans. Doctors, hospitals, and other providers might be willing to work with you—all it may take is a phone call to get help. Some providers may offer cash discounts or interest-free payment plans. 

• Check for financial help for medical bills through aid programs. If you can't pay your doctor bills because of financial hardship, you can turn to several organizations for help. Ask your hospital or doctor about charity care programs in your area that help with medical bills. 

You could also look into Medicaid. This government program offers low-cost health insurance to people with modest incomes. 

Ways to manage medical debt

A repayment plan is your best defense against medical debt. Here are a few ideas for how to approach medical bills.  

• Use a debt payoff app. If you plan to pay something to your medical debt each month, there are apps that could help. Achieve GOOD is a free app that helps you see where your money’s going, make a debt payoff plan, and get debt-free faster. 

• Consider borrowing if it will improve your financial situation. It could make sense to consolidate medical debt if it would make your monthly payments more manageable. You could get a HELOC or home equity loan if you own a home, or look for a low-interest medical loan. 

• Explore debt negotiation or debt resolution. If you reach a point where you can't afford to pay medical debt at all, it might be time to consider negotiation. Medical debt resolution could help you pay off bills for less than what you owe. 

Where to find financial support when you're facing big medical bills

Lots of situations can lead to financial hardship and leave you unable to pay medical bills. For example, a job loss or divorce paired with a serious accident or diagnosis of a critical illness can turn up the pressure financially. Regardless of how you got into medical debt, it's okay to look for help if you need it. 

Here are some of the places you might turn to for support. 

• Hardship financial assistance and medical debt forgiveness programs. Hardship programs lend you a hand when money is short because of a situation you couldn't predict or prevent. Medical debt forgiveness programs could help you get some of your medical bills canceled so you don't have to pay them. 

• Hospital charity care and sliding scale fees. We've already mentioned charity care, but it's worth another shout-out, since these programs exist to help people with high medical bills for hospital care. Eligibility is usually income-based, so if you don't qualify you could still ask whether your hospital or provider could charge you on a sliding scale to help with costs. 

• Nonprofit credit counseling. If you don't qualify for the types of assistance mentioned here, it could be worth your time to chat with a credit counselor. A nonprofit credit counselor can look at your medical bills, income, and budget to offer solutions that will work for your situation. 

Moving toward financial stability after an expensive healthcare situation

Once you have medical bills under control, you can think about how to manage any new ones you might have in the future. You could start a health care savings fund, but that's not realistic for everyone. So here are some other options to think about. 

• Review your insurance. Do you know exactly what your insurance covers (or doesn't)? If not, it's a good idea to go over your coverage line by line so you know what the insurance company pays and what you'll pay for care.

• Consider a change to your coverage. If you have the option to increase your coverage or move to a different insurance company, look into how much that might save you on out-of-pocket costs. The tradeoff may be higher premiums.

• Get to know your providers and how medical billing works. If you're in doubt about how your doctor or hospital charges you for care, ask. Medical bills are confusing, and you don't have to pay them blindly without knowing why you've been charged the way you have. 

• Connect with a patient advocate. Patient advocates help people navigate the healthcare system. An advocate can work with you on things like medical claim denials, co-pay relief, and financial aid to cover eligible medical expenses. Check out the Patient Advocate Foundation for more on how to find a patient advocate and how they can help. 

What's next

• Review your medical bills line by line, if you haven't already, to check for any errors or charges you don't understand. 

• Sit down with your budget to figure out where medical debt repayment might fit in. Ask your doctors or providers about payment plans if you can't pay what you owe all at once. 

• If you have medical bills that have gone into collections, talk to a debt expert about the best way to deal with them. Debt resolution, for example, could help you get rid ofsome of the debt and get the rest forgiven.