A large medical bill is scary, but it won’t hurt your credit and it doesn’t accrue interest charges. It’s when it gets to collections that your credit will suffer and you may need medical debt relief. And unfortunately, that’s a problem that one in five Americans are currently facing. A new report from the Journal of American Medicinal Association (JAMA) found we owe roughly $140 billion in medical debt—nearly twice what was previously estimated.

This guide can help you understand what to do to avoid medical debt and what to do if you’re already stuck with bills that you cannot pay.

Table of Contents:

Paying off medical bills before they go to collections

If you currently have a medical bill – not a medical debt in collections – you can talk directly to your provider’s billing department and/or your insurance company to try to negotiate. Unfortunately, most people don’t even think to try this. Our 2020 medical debt survey revealed that 60 percent of respondents didn’t try to negotiate their bills.

60% of those with medical debt said they've never tried to negotiate their bills.

“What I found in my research is that almost no one negotiated,” says Deb Gordon, author of “The Health Care Consumer’s Manifesto.” “And the reason was most often, ‘I didn’t know you could do that’ or ‘I never even thought of that.'”

It doesn’t always work. Only 27 percent of survey respondents who negotiated said they were successful. But it’s better to try than simply settle for the price you were quoted.

In addition, even if the bill has passed to collections, you can still try contacting the original medical service provider to negotiate. Medical service providers may be willing to work with you directly, so you can avoid the stress of trying to deal with a collector.

Review your bill to make sure it’s correct

medical debt; people looking at a medical invoice on a laptop screen“An itemized bill is important,” says Gerri Detweiler, credit expert and Debt.com contributor. Just because it looks official doesn’t mean that all the information is correct.

Take some time to review your health care bill. Did you receive all the procedures listed? Or were some of them added by mistake? Checking for errors can save you thousands of dollars in medical expenses if you find out you’re being charged for a procedure that you didn’t receive. “If you work in a workplace where they have an HR department, a lot of times they can connect you with someone at your insurance company who can help look at the bill for you,” Detweiler adds.

Know what your insurance covers

When looking through your bill, make sure to check the column that shows how much your insurance company put toward each item. Health insurers make mistakes, too, and there may also be errors here. If you have any questions about what’s covered, what’s not covered, and how much should be covered, call your insurance company directly and ask. Even if a claim is rejected, you have a right to appeal.

If you have gap insurance, also make sure to check with the gap provider to see if it would cover the bill. Gap insurance is often not applied correctly, and you may be covered even if your primary insurance doesn’t cover a procedure.

Talk to your medical provider first

Before you get a lawyer or debt settlement company to intervene, talk to your medical provider directly. Even if they already sent the bill to collections, you still may be able to discuss your payment arrangement with them. You may even be able to reduce the amount of your bill.

Ask about a payment plan

In the end, all that matters to the medical providers is that they get their money. You may be able to negotiate a payment plan with monthly payments that will be easier on your wallet than paying everything in a lump sum upfront.

Gerri Detweiler recommends trying this first. However, it’s important to understand the terms of the payment plan and be cautious. “Sometimes the problem is they will let you set up a payment plan for a very small amount of debt, but it’s not clear how long you’ll be in debt,” Detweiler says. “You could be paying that off for a decade.”

She also warns that many payment plans aren’t very formal, which can cause trouble when providers make sudden changes to the rules. “They may not keep records of what they agreed to,” she says. “It’s so ad hoc, it’s hard to say what you’ll get. You want to document it, but that’s easier said than done.”

If you’re careful about documenting the process and getting agreements in writing, then asking about a payment plan could be the solution for you. “Anecdotally, I can say that a lot of the consumers I spoke to were on payment plans,” says Gordon. “If you have a deductible of thousands of dollars and you go in for a knee surgery but can’t pay your share, the hospital would much rather take a small amount a month that you can afford to pay reliably than write you off entirely. They would rather get something than nothing, and often they get nothing.”

Bills Can Be Sent to Collections Even if You’re Paying

If you have a payment plan setup have everything in writing. Make sure to clarify if your balance could be sent to collections if it’s not paid off in an acceptable time frame.

Medical credit cards

Some offices that don’t offer payment plans offer medical credit cards instead. Usually, they offer a 6-12-month interest-free period. Calculate what your monthly payments would be to pay off what you owe in that period. If it’s feasible, the medical credit card may be worth it. If you won’t be able to make the payments and you’ll get hit with interest later, see if there is another way to pay.

The life cycle of medical debt

This infographic shows how your bill could become a troubling debt.

Medical Debt Life Cycle Infographic

Causes of medical debt

Our survey showed that most medical debt was caused by unexpected healthcare expenses. Here’s how it broke down:

What is the primary source of your medical debt? Percentage of respondents
Hospitalization 24.80%
Diagnostic tests 21.68%
Emergency room 18.95%
Doctor visits 14.84%
Outpatient services 10.94%
Dental care 4.30%
Prescription drugs 3.71%
Nursing home/long-term care 0.78%

These treatments and their costs can leave people struggling. According to a 2016 medical bills study from The Kaiser Family Foundation and The New York Times, 26% of people said they or someone in their household had trouble paying medical bills within the last 12 months.

This study also concluded that the majority of those with medical debt (66 percent) are struggling because of a one-time or short-term medical event. It happens to both those with insurance and those without – expensive procedures and medical care don’t discriminate.

Additionally, the amounts people struggle to pay vary widely. The Kaiser Family Foundation study broke down how many people are struggling with what amounts:

  • Less than $500: 10%
  • $500 to less than $1,000: 14%
  • $1,000 to less than $2,500: 19%
  • $2,500 to less than $5,000: 24%
  • $5000 to less than $10,000: 18%
  • $10,000 or more: 13%

The Peter G. Peterson Foundation projects that healthcare spending in the United States is only going up from here:

medical debt; graph that shows healthcare costs rising; from the Peter G. Peterson Foundation

If you get high medical bills like these and they go to collections, then you must deal with the medical debt.

Options for dealing with medical debt in collections


When the bill goes to collections, there may be more room to negotiate than you think. “You’re going to be negotiating it like any other collection account,” says Detweiler about medical debt in collections. “You’re going to see if you can get a reduction in the amount that you owe.”

Offer to pay less than the amount they’re asking for or to set up a payment plan. The collector would rather get something than nothing.

Medical debt consolidation

Consolidating your medical debt means rolling all your medical debt into one monthly payment. You can do this in a couple different ways:

Debt consolidation loans

If you have good credit, then you should be able to qualify for a debt consolidation loan. This is an unsecured personal loan that you can use to pay off other debts, including unpaid medical bills. This will allow you to pay off the medical bills in a lump sum to avoid the hassle of setting up repayment plans.

Debt management program (DMP)

To put your medical debt in a DMP, you must be enrolling in the program primarily for credit card debt. Read about credit counseling below to find out how it works.

Credit counseling

Certified credit counselors help you find the best way for you to pay off your debt. Often, this involves enrolling in a debt management program (DMP) in which your counselor consolidates your debt payments and guides you along the path toward debt relief. Like negotiating your own payment plan, a DMP will help you pay off your debt in full.

Medical settlement

Settling your medical debt means paying less than what you owe. Your monthly payments will be smaller, but your credit score will take a hit.

To settle, you can either negotiate directly with a collection agency or work with a debt settlement company. Setting up a settlement program through a company is often a better solution if you have multiple accounts in collections.


If the amount of medical debt you owe is simply too much for you to ever pay back, bankruptcy may be the best option.

It will definitely damage your credit score. But it will provide the fresh start you need.

Chapter 7 or Chapter 13?

In Chapter 7 bankruptcy, the bank sells your assets to repay your creditors. In Chapter 13, the courts determine a plan that will help you repay some of what you owe. To file for bankruptcy, you need to work with a lawyer.

If it’s wrongly in collections…

“If you were waiting for insurance to finish processing it or you had a dispute over the bill, you might want to call the medical office and see if they can pull it back from collections,” says Detweiler. “You’d want to do this right away.”

Act quickly if you think a medical debt has erroneously gone to collections so it doesn’t have time to affect your credit. Contact your insurance if they were supposed to pay. If you are disputing the bill, contact your medical provider. They may be able to pull it back from collections.

Can you go to jail for not paying a medical bill?

Absolutely not. There is no longer such a thing as a debtors’ prison. If you don’t pay a medical bill, it will likely be sent to collections, may leave a bad mark on your credit report, and could lower your overall credit score, but you will not go to jail.

Start healing your medical debt. Call us today for a free consultation.

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Article last modified on July 24, 2023. Published by Debt.com, LLC


Gerri Detweiler

Consumer & Small Business Finance Expert