Around 23 million adults in the U.S. owe a medical debt, according to a 2022 Kaiser Family Foundation (KFF) survey. Of that number roughly 11 million owe at least $2,000 in medical bills, and around three million owe more than $10,000.

The same survey found that of those who owed a $2,000 medical bill, 32 percent weren’t able to pay it. And more than half of those surveyed with a $6,000 medical bill said they couldn’t afford to pay the debt. That’s a lot of worry on the minds of people just trying to take care of their and their family’s health.

The stress of unpaid medical debt can also take a toll on your mental health, according to a study by AIMS Public Health. The AIMS study found that people with medical bills are three times as likely to have depression, anxiety, and stress over their medical debt.

Unpaid medical debt or bills paid late may also show up as negative payment history on your credit report. When that happens, your credit score will likely take a hit.

All that pressure might make you want to take to your bed and give up. But people pay off huge medical bills every day, so don’t assume paying off medical debt is beyond your reach.

Here are the steps you should take to make sure you can pay off what you owe and only what you owe.

Take a look at the bill

Before anything, ask for an itemized bill and verify the information is correct.

Is that your name? Do the dates match? Was that procedure performed? Are there duplicate charges? Roughly, 80% of medical bills contain at least one error, according to personal finance site NerdWallet. Don’t assume a mistake wasn’t made.

Read: Understanding Your Medical Bills

Find out what insurance will cover

If you have insurance, the hospital or healthcare provider will file a claim with the insurance company. It’ll then send you an Explanation of Benefits (EOB) outlining what qualifies for reimbursement. Compare that to your medical bill before paying anything.

A survey from Consumer Reports found “nearly 3 in 10 Americans with insurance had a medical debt sent to a collection agency.” One-fourth of them didn’t even know they owed a bill.

Health insurance companies make mistakes, too. You can call to ensure the claim is correct.

Compare medical bills with EOBs

Your insurance provider will send what’s known as an explanation of benefits (EOB) for every medical claim submitted. At first glance, the EOB looks like a bill, but that’s not its purpose.

The EOB shows the service provided, how much your healthcare provider bills for that service, and the medical billing code. Along with that information, the EOB also shows the amount your insurance company will reimburse and the amount under “patient responsibility” that you owe the doctor or hospital.

Save all your EOBs in a file so you can compare the “patient responsibility” amount to the amount owed shown on the bill you receive from your healthcare provider. Look closely at the dates on the EOB and the medical bill. Sometimes, medical billing offices send a bill before the insurance company mails the EOB, which can result in overpayment.

If you’ve paid a medical bill, double check the amount billed and paid against the EOBs to make sure you didn’t pay too much. If you did, contact the doctor’s office or hospital, explain the situation and ask for a refund for the overpayment.

Find out: How to Appeal a Health Insurance Claim Denial

Price research

After confirming the information in your bill and EOB, do research on the pricing.

You can search through health insurance claim databases like Healthcare Bluebook or FAIR Health for prices in your area. Then compare prices on the Centers for Medicare and Medicaid Services website by using the billing code. Make sure yo are only paying a fair amount for the services you recieved.

Negotiate a payment plan or settlement

When facing a large hospital bill, don’t automatically assume there’s no room for negotiating. You may be able to set up a payment plan with the billing department for monthly payments you can afford. Settling the debt for a smaller amount could be another option.

Hospitals and other healthcare providers want to get rid of your medical debt just as much as you do. That way, they don’t have to keep track of a payment plan or hound you when your payments are late. So, don’t overlook asking them to settle the debt for a lower amount.

Contact the billing department and tell them you can pay a smaller amount right away if they will settle. For example, if you owe $5,000, ask if they will accept $3,000, or even $2,500 to settle the debt immediately. Then do your best to scrounge up the money, whether that means borrowing from a family member or putting the debt on a low-interest credit card.

They may take you up on your offer or at least counter with an amount smaller than $5,000 to settle the debt. If negotiating with a hospital seems intimidating, don’t be afraid to take the chance. You have nothing to lose, and you may be able to pay off the medical bill sooner.

Read: Strategies for Negotiating with the Hospital Billing Department

Hire a medical billing advocate

If you’re facing a large amount of medical debt, you’re probably staring down a stack of EOBs and confusing medical bills. Hiring a medical billing advocate if your medical debt is more than a few thousand dollars could be a good move and help you pay off debt faster.

A medical billing advocate knows what to look for in EOBs and medical bills to see whether you’re being overbilled or you overpaid a bill. Medical billing advocates are also experienced in negotiating medical bill settlements and appealing denied insurance claims.

Medical billing advocates typically charge a percentage of the amount they save you on medical bills. Some charge an hourly rate, ranging anywhere from $75 to $350 an hour. Hiring a medical advocate is only worth it if their fees cost less than your medical bills.

However, saving yourself the stress of poring over bills and EOBs, negotiating and being transferred to four different insurance departments, only to have the call drop when you finally reach the right person, may be well worth the medical billing advocate’s fee.

Read: Reasons You May Want to Hire a Medical Billing Advocate

Use a medical credit card

Trading one debt for another is only helpful when it saves you money. There are more than a few instances where using a credit card to pay medical debt can be a smart move.

Many medical credit cards offer a six to 12 month period of zero percent interest. Add up the payments. If you can afford that balance by the time that window closes it’s worth it.

If not, you’ll get stuck paying the deferred interest.

Paying medical debt with a credit card could put you in an equally bad scenario, one where you have too much credit card debt and pay interest on that charged medical bill for months or years. In certain cases, though, paying off medical debt with plastic could work in your favor if you fall into the following categories.

You don’t have enough cash

When you can’t afford to pay a medical bill right away, you still need to protect your credit score by keeping the account out of collections. In this case, paying with a credit card stops the stressful calls with the billing department and avoids collections.

However, you’re typically moving the debt from a no-interest account to one where you could pay a high-interest rate. A better option may be working out a payment plan with the billing office instead.

The bill is relatively small

Do you really want to risk that pesky $400 debt hurting your payment history if it’s sent to collections? Charging the bill to your credit card could be a decent option, but only if you have a solid plan to pay the amount off soon to minimize interest payments.

You use a card with a 0% APR

If you must pay a medical bill with a credit card and have good to excellent credit, consider applying for a new credit card that has a 0% interest rate for a year or longer. That way, the bill is safely out of the immediate credit-damaging territory, and you won’t pay extra due to a high-interest rate.

Be careful, though. Create a budget to pay the debt off before the promotional period ends, or you could pay more in the long run when the interest rate jumps.

Find out: 7 Hazards of a 0% Interest Offer and How to Avoid Them

You pay off the bill with a credit card that has a sign-up bonus

If you’re good at managing credit card debt and have good to excellent credit, another option could be applying for a credit card that offers a sign-up bonus once you spend a certain amount. For example, a bonus of $200 if you spend $1,500 within 90 days after opening the account.

If you know you can pay the balance off soon, you can use the sign-up bonus to pay a lower amount on the bill. While you’re at it, choose a card with a 0% interest rate for a year or longer. Then make sure you pay off the balance before the promotional period ends to avoid paying more interest than the amount you received as a sign-up bonus.

You can negotiate a lower lump sum settlement

What if you ask the billing department if you can settle your $2,500 debt today with a reasonable lump sum credit card payment – $2,000 or $1,800, for example? That person you’ve been arguing with for months may jump at the chance to permanently file away you and your account.

Proceed with caution, however. Make sure you create a plan to pay the credit card debt off as soon as possible and stick to your goal to minimize interest payments.

Find out: Everything You Need to Know About Medical Debt Settlement

You have no other credit card debt

If you already have a lot of credit card debt, charging one more big bill isn’t the best idea. However, if you’ve been diligent about not carrying a balance on your credit cards, and you know you can pay the balance off in a few months, charging a medical bill to a credit card could be a better option than the bill going to collections and hurting your credit score.

Your credit utilization rate is low

Charging a large medical bill to your credit card isn’t a smart move if your credit utilization rate – the ratio of overall revolving credit debt to your available credit – is already high. That’s because your credit utilization rate accounts for around 30% of your credit score, and keeping your credit utilization rate lower than 30% is better for your credit score.

So, even if you keep your account out of collections by paying with a credit card, you might still lower your credit score by utilizing too much of your available credit.

Make sure your credit utilization rate is well under 30% before paying a large medical bill with a credit card. Also, do your best to pay off the balance quickly and use a 0% APR credit card if you can.

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Article last modified on March 22, 2023. Published by Debt.com, LLC