Without or without insurance, medical debt can be a huge burden. Hospital and doctor’s bills can be extremely high and sometimes impossible to pay without a plan. Even if you have an insurance plan, you can quickly get overloaded with co-pays, deductibles, and prescriptions.

medical professional

Unpaid healthcare expenses are easily one of the largest debts that people can face in their lives, and knowing where to turn for help can be a challenge. That’s added on top of your other bills and expenses you have to pay each month.

What’s more, sometimes health care bills are hard to decipher and can even be inaccurate, so it’s important to be cautious whenever dealing with them. It’s also useful to know what options are available to you to make it easier to manage your medical debt. We’ve got all the information you need below.

Are your medical bills accurate?

When you’re dealing with medical debt, it can be hard to determine what you are being charged for. Depending on your insurance (assuming you have insurance) it isn’t always clear in the first place just how much you might owe. Services might sometimes overlap or be described in technical language, and there can be billing for any variety of tests, medicine, use of equipment, or time spent with doctors or specialists.

Hospital bills can be particularly hard to break down. Sometimes insurance companies won’t pay what they said they would, and doctors or hospitals will bill you for unexpected items you thought were supposed to be covered by your healthcare plan. There can also be issues of duplicate billing and other mistakes that are hard to track down. Plus, your bills might be staggered so that you don’t actually know the total cost of what you owe.

For all these reasons, it’s crucial to be very careful and thorough when dealing with your medical bills to ensure that you aren’t paying more than you should be. Unfortunately, this can mean a lot of time on the phone clarifying every potential issue as it arises. Otherwise, these issues can be buried in paperwork. It’s also essential to keep thorough and accurate records so you have a reference point whenever a new question arises.

One of the best things to do is familiarize yourself with your insurance plan’s explanation of benefits (EOB). This isn’t always clear, but you can get a better understanding of the types of procedures you’re covered for. You can also find out what percentage you’re responsible for, and what medical providers are considered in-network versus out-of-network, or Tier 1 versus Tier 2. If you’re confused, call your healthcare company for clarity.

How does medical debt affect your credit?

In the past, medical debt was treated just like any other type of debt on your credit report. Any relevant late payments, charge offs, or collections surrounding medical bills were weighed the same as credit card or any other type of debt.

Now, however, both laws and credit scoring models have changed to better benefit consumers who are dealing with medical debt. One of the best recent changes happened in 2015. The three major credit bureaus decided not to report any medical debt until 180 days, compared to just 30 days for other types of debt. This gives you more time to receive your bills, make sure they’re accurate, and work out a payment plan.

Credit scoring models are also putting less emphasis on medical debt when it comes time to calculate your credit score. FICO 9, the newest model, gives medical collections less weight than other collections or debts owed.

This provides some relief when you’ve had medical and consequently, financial, situations that are out of your control. The downside is that many lenders still use older FICO models where medical debt is treated equally with other debt. But as lenders start to upgrade and the popularity of FICO 9 continues to grow, you can expect to see some improvement in your credit score.

How to Handle Your Medical Debt

Even with the proper planning and familiarizing yourself with your benefits, it’s easy to find yourself saddled with overwhelming medical debt. Whether you’ve had a major operation or your child broke his leg, receiving medical care is expensive.

Luckily, there are a few different ways to handle medical debt, many that are more amenable than other types of consumer debt. The best thing is to address the debt as soon as you start receiving bills, otherwise you can set yourself up for expensive late fees and negative items on your credit report.

What are medical debt payment plans?

The cost of medical debt can be well outside of anyone’s reasonable budget, so one of the first things you should do is to arrange for a good payment plan. Most medical debts should be interest-free, and the healthcare industry is usually willing to work with you as long as you’re willing to pay something.

If you can’t meet the payments they request, be honest about it and inquire about special hardship plans. You can only afford to pay as much as you can afford to pay and they’re going to have to accept that. Be aggressive about it and let them know that you intend to pay everything back, but you can only do it at a reasonable rate.

When you’ve established what that is, avoid missing any payments if you want to remain in good standing and not have your debt sold to collections. If you discover that your bills were sent to collections, you should call the collections agency right away and tell them that a mistake was made. Of course, if your medical debts are already in collections, you’ll have to deal with that in a different way. In either case, it always helps to talk to a free non-profit credit counseling service or debt consultant.

What is medical debt management?

If your medical debts are just one debt among many, you’re not alone. It’s not uncommon for people to accrue consumer debt alongside medical debt, very often because of the circumstances surrounding the medical debt. If you or someone in your family has had an illness or hospital stay, it’s commonplace for other debts to build.

You or a loved one might be out of work, or dealing with other expenses. When debts become out of control, debt counselors can help. They can create debt management plans specifically tailored to your own unique situation.

What is medical debt negotiation?

Depending on the circumstances of your medical debt, you might be able to negotiate a lower payment on your own or with help from a debt relief company. Sometimes hospitals are willing to work with you. Other times they’re more likely to negotiate with a professional who knows more about the system and has leveraging power.

You might even have luck asking your insurance company for help. Negotiations and even settlements can take place as part of a complete debt relief package, or one specifically centered on medical debt. Talk to a debt counselor to find out more.