How to Pay Off Medical Debt: A Complete Guide

Medical debt is unlike any other kind of debt. You didn’t plan for it. You didn’t shop around for rates. You were sick or hurt or in an emergency, and now there’s a bill that might be bigger than anything you’ve ever owed. That feeling of unfairness is legitimate — and so is the fact that medical debt is more negotiable, more forgivable, and more manageable than most people realize.

If you’re staring at medical bills and wondering where to start, this guide walks through every option available to you, in the order you should try them.

For background on how the medical billing system works and your basic protections, see our how medical debt works guide. This guide picks up where that one leaves off, with specific action steps.

Step 1: Don’t Pay Anything Yet

This is counterintuitive, but it’s important. When a medical bill arrives, your first instinct might be to pay it immediately or put it on a credit card to “deal with it.” Don’t.

Here’s why:

• The bill may contain errors (studies suggest 30-80% of medical bills do).
• You may qualify for financial assistance that could reduce or eliminate the bill.
• You have time. Medical providers typically don’t send bills to collections for 90-180 days, and recent rules require a one-year waiting period before medical debt can appear on your credit report.
• Putting medical debt on a credit card converts 0% interest hospital debt into 20%+ credit card debt. This is almost always a mistake.

Your first move is to request an itemized bill and review it carefully.

Step 2: Get the Itemized Bill and Hunt for Errors

Call the hospital or provider’s billing department and ask for a detailed, line-by-line itemized statement. The summary bill they send initially often lumps charges into vague categories (“laboratory services: $4,200”). You need the specifics.

Once you have it, look for:

Duplicate charges. Were you billed twice for the same blood draw, medication, or procedure? This happens frequently.

Charges for services you didn’t receive. Were you charged for a specialist consultation that never happened, or medications you didn’t take?

Incorrect billing codes. Medical billing uses CPT and ICD codes. A single digit off can change a routine procedure into a much more expensive one. You can look up procedure codes at fair health consumer to see if the codes on your bill match what you actually received.

Incorrect room charges. Were you charged for a private room when you were in a shared room? For ICU time when you were in a regular bed?

Unbundled charges. Some procedures should be billed as a single package but get broken into individual charges that cost more when separated.

If you find errors, call the billing department and dispute them. Be polite but firm. Ask for a corrected bill. If the provider pushes back, request a review by their billing supervisor.

Step 3: Compare What You Were Charged to Fair Prices

Hospital prices vary wildly. The same procedure can cost $2,000 at one facility and $15,000 at another. Look up fair prices for your procedures using:

• Healthcare Bluebook: Shows fair prices by procedure and location.
• FAIR Health Consumer: Provides cost estimates based on your zip code.
• Your hospital’s published prices: Hospitals are now required to publish their prices online (though many bury them).

If your charges are significantly above the fair market rate, use this data in your negotiation. “I see the fair price for this procedure in my area is $3,200, but I was charged $8,500. Can you help me understand the difference?” is a conversation most billing departments are willing to have.

Step 4: Check Your Insurance Coverage

If you have insurance, review your Explanation of Benefits (EOB) for each claim. Make sure:

• All services were submitted to your insurance. Sometimes providers fail to file claims, leaving you with the full bill.
• In-network providers were billed as in-network. If you visited an in-network hospital but were treated by an out-of-network provider (common with anesthesiologists, radiologists, and ER doctors), the No Surprises Act protects you from balance billing. You should only owe your in-network cost-sharing amount.
• Your insurance paid what they should. If a claim was denied, call your insurance company and ask why. Common denial reasons include missing prior authorization, incorrect codes, or timely filing issues — many of which can be resolved with an appeal.

Filing an insurance appeal is free and worth doing. About 50% of appealed claims result in at least some additional payment.

Step 5: Apply for Financial Assistance (Charity Care)

This is the step most people skip, either because they don’t know it exists or they assume they won’t qualify. But hospital financial assistance programs have income thresholds that are often higher than you’d expect.

Who qualifies:

• Most nonprofit hospitals (which includes the majority of hospitals in the US) are legally required to offer financial assistance.
• Eligibility is typically based on your household income relative to the Federal Poverty Level (FPL).
• Many programs offer full write-offs for incomes up to 200% of FPL, and partial discounts up to 300-400% of FPL.

2026 Federal Poverty Level reference (for a family of 4):

Income Level	% of FPL	Likely Assistance
$31,800	100%	Full write-off
$63,600	200%	Full or significant reduction
$95,400	300%	Partial reduction (30-70% off)
$127,200	400%	Possible discount (10-30% off)

How to apply:

1. Call the hospital’s billing department and ask for their financial assistance application.
2. Fill it out completely. You’ll typically need proof of income (tax return, pay stubs), household size, and sometimes bank statements.
3. Submit it and follow up. Hospitals often take 4-8 weeks to process applications. Call every two weeks for a status update.
4. While your application is being reviewed, the hospital generally cannot send your account to collections.

Even if you’ve already been sent to collections, many hospitals will still accept financial assistance applications. It’s always worth asking.

For more on hardship programs, see our hardship program guide.

Step 6: Negotiate a Discount

If you don’t qualify for charity care (or even if you only get partial assistance), you can still negotiate.

Ask for the Self-Pay or Cash Price

Hospitals charge insured patients rates that reflect complex negotiated contracts. The self-pay rate — what they charge people without insurance — is often 40-60% lower than the billed amount. Even if you have insurance, once your insurance has paid its portion, you can sometimes negotiate your remaining balance down to something closer to the self-pay rate.

Offer a Lump Sum

If you can pay a significant portion of the bill at once, use that as leverage. “I can pay $2,000 today toward this $5,000 balance. Can we settle the account?” Many billing departments have authority to accept lump-sum settlements at 30-50% of the balance, especially if the alternative is chasing payments for years or writing off the debt entirely.

Ask for an Uninsured Discount

If you’re uninsured, ask specifically about uninsured discounts. Many hospitals offer 20-50% off for uninsured patients. Some states require this by law.

Be Persistent

The first person you talk to may not have authority to negotiate. Ask for a supervisor or a patient financial counselor. Be polite, be firm, and don’t accept “no” from someone who can’t say “yes.”

Step 7: Set Up an Interest-Free Payment Plan

Most medical providers offer payment plans, and unlike credit cards or loans, many hospital payment plans charge zero interest. This makes them one of the most favorable forms of debt you can carry.

When setting up a plan:

• Ask explicitly if there’s interest or fees. Some providers charge interest on balances over a certain amount or payment plans longer than 12 months. Get confirmation in writing.
• Negotiate the monthly amount. Providers will often accept very low monthly payments ($25-50/month) if you’re consistent. They’d rather get slow, steady payments than nothing.
• Set up autopay. This ensures you never miss a payment and gives the provider confidence that payments will continue.
• Get the agreement in writing. Document the total balance, monthly payment, interest rate (hopefully 0%), and any conditions.

A $5,000 medical bill on a 0% payment plan at $100/month costs you exactly $5,000 over 50 months. The same balance on a credit card at 22% would cost roughly $6,800. Never convert interest-free medical debt to interest-bearing credit card debt.

Step 8: Understand Medical Credit Cards (Proceed With Caution)

Companies like CareCredit offer medical-specific credit lines with promotional 0% APR periods (often 6-24 months). These can work, but they have significant risks:

The trap: If you don’t pay the full balance before the promotional period ends, you owe deferred interest on the entire original balance — not just the remaining amount. On a $5,000 balance with 26.99% deferred interest, that penalty can be $1,000+ added to your balance overnight.

When CareCredit makes sense:

• You have a specific bill with a clear timeline
• You’re confident you can pay it off within the promotional period
• The provider doesn’t offer their own 0% payment plan

When it doesn’t:

• You’re unsure about your ability to pay it off in time
• You already have credit card debt
• The provider offers a 0% payment plan (which is always better — no deferred interest risk)

Step 9: When Medical Debt Goes to Collections

If your medical debt has been sent to collections, you still have options.

Verify the debt. Under the Fair Debt Collection Practices Act, you can request written verification of the debt within 30 days of the collector’s first contact. They must provide proof that you owe the amount, that they’re authorized to collect it, and that the amount is correct.

Check the statute of limitations. Medical debt has a statute of limitations (typically 3-7 years depending on your state) after which the collector can no longer sue you for the balance. The debt doesn’t disappear, but the legal leverage shifts significantly in your favor. Note: making a payment or acknowledging the debt can restart the clock in some states.

Negotiate a settlement. Collection agencies typically buy medical debt for 5-20 cents on the dollar. They have significant room to negotiate. Offer 25-50% of the balance as a lump sum. Get any agreement in writing before paying, and make sure it specifies the debt will be reported as “paid in full” or “settled” to credit bureaus.

Know your credit protections. Medical collections under $500 no longer appear on credit reports. Paid medical collections are removed entirely. There’s a one-year waiting period before any medical debt can be reported — giving you time to resolve it before it affects your credit.

For more on dealing with collectors, see our collections guide.

Step 10: Preventing Future Medical Debt

Once you’ve dealt with your current medical bills, protect yourself going forward:

• Maintain health insurance. Even a high-deductible plan with an HSA is better than nothing. Out-of-pocket maximums cap your annual exposure.
• Fund an HSA or medical sinking fund. Set aside money specifically for medical expenses. HSA contributions are tax-deductible, grow tax-free, and can be withdrawn tax-free for medical expenses.
• Use in-network providers whenever possible. The cost difference between in-network and out-of-network care can be enormous.
• Ask about costs before non-emergency procedures. Get price estimates in writing. Compare costs between providers. You have more pricing power than you think for planned procedures.
• Keep your emergency fund funded. A healthy emergency fund is your first line of defense against medical debt. A $2,000 ER copay is stressful but manageable when it comes from savings rather than a credit card.

FAQ

Can medical debt affect my credit score?

Yes, but less than it used to. Paid medical collections are removed from credit reports entirely. Unpaid medical debt under $500 isn’t reported. And there’s a one-year grace period before any medical debt can appear on your report. Large unpaid medical collections (over $500, unpaid for more than a year) can still lower your score, though the impact is typically less severe than credit card collections.

Should I hire a medical billing advocate?

If your bills are over $10,000 and you’ve hit a wall negotiating on your own, a medical billing advocate can be worth it. They typically charge 25-35% of the amount they save you, so they’re motivated to find errors and negotiate aggressively. For smaller bills, the steps in this guide should be sufficient.

Can hospitals sue me for unpaid medical debt?

Yes, and some do, though it’s becoming less common as public scrutiny increases. Nonprofit hospitals face particular pressure to exhaust financial assistance options before pursuing legal action. If you’re sued, respond to the lawsuit (ignoring it results in a default judgment against you), verify the debt amount, and consider consulting with a legal aid attorney. Many areas have free legal clinics for debt-related cases.

I already put my medical bill on a credit card. Can I undo that?

Unfortunately, once the charge is on your credit card, you owe the credit card company, not the hospital. But you can still try to negotiate with the hospital for a retroactive discount — if they agree to refund a portion of the charge to your card, that’s less you owe. You can also look into a 0% balance transfer card to stop the interest while you pay it off. Going forward, always explore payment plans and financial assistance before reaching for a credit card.

What if I have medical debt from years ago that I never paid?

Check the statute of limitations in your state. If the debt is past the statute, collectors can’t sue you for it, and you have significant leverage in negotiation. If it’s within the statute, it’s still worth contacting the original provider about financial assistance — some hospitals accept retroactive applications. For very old debt that’s already damaged your credit, weigh the benefit of paying it (which may not improve your score if it’s already aged off) against letting it expire naturally.