Can I get medical debt lowered or forgiven?

As if the medical emergency wasn’t bad enough, now you’re looking at an invoice that you don’t know how you’ll pay. Medical debt can come on quickly and in large amounts—like, really large amounts. If you’ve received medical care and gotten a big bill for it, you might be wondering what to do.

Scary? Yes. But you can manage your medical debt. Learn how to:

• Lower your medical debt

• Understand the collections process that will likely ensue

• Know your rights as a consumer

• Use resources to help resolve your debt

• Consider other debt solutions to address your medical debt

Let’s demystify medical debt together below.

What is medical debt? 

Medical debt is the money you owe to a healthcare provider (or a collection agency) for receiving a medical service or product. While a $20 copay could technically be considered a medical debt, what we’re talking about are the medical debts that are overwhelming, hard to pay off, and bring on high levels of stress.

Medical debt affects millions of people. In fact, 41% of adults in the US are saddled with some form of medical debt. It is the most common type of collection account found on credit reports. So even though you may feel lonely, know that you’re not alone—and that you’ve got help.

Medical debt forgiveness through your insurance provider

One way to resolve medical debt is to get the creditor to reduce the amount you owe. You might be able to do this by securing more insurance coverage.

If you had medical care that wasn’t covered by your insurer, it’s worth the effort to have your claim reconsidered. Anytime a claim is denied or rejected, you can file an appeal. 

How to request more insurance coverage

First things first: there is a difference between a denied claim and a rejected claim. 

Get your rejected claim back into the system

A rejected claim didn't get processed because of missing or inaccurate information. Maybe a couple of numbers got transposed, or your name was misspelled. Get to the bottom of the error and resubmit the claim.

Appeal a denied claim

A denied claim means that the insurance company won't pay the claim. There are hundreds of reasons an insurance claim might be denied. Maybe the treatment wasn’t considered medically necessary, or maybe you were supposed to get it preauthorized. You’ll have to find out why they denied your claim to know the best way to appeal the decision. Sometimes you can fix the error or otherwise convince them that you are entitled to coverage.

If your claim is denied, the insurer has to explain the reason for the denial. They also have to tell you how you can dispute the decision. Whether your appeal is handled by the insurer or by a third party depends on the nature of the denial. An outside third party will handle it if:

• There is disagreement about the medical judgment

• The insurer thinks the treatment was experimental

• The insurer believes you gave false information on your application for insurance

Appeals for other types of denials will be handled by your insurer.

More ways to lower your medical debt

You might be surprised at the results you could get from being organized and proactive. Here are some ways you can advocate for yourself and potentially lower costs:

Look over your billing statements for errors. Carefully review your billing statements and comb through them for errors. Mistakes made during the billing process do happen—more often than you might realize. If you spot something, reach out to the hospital, doctor, or medical provider as soon as possible.

Ask for a payment plan. Request a payment plan, which can help break down your bill into more manageable chunks. Many medical debt installment plans come with no or low interest. Reach out to your medical provider to see what is possible.

Request a superbill. See if you can get a superbill, which is an itemized, detailed list of services that you can use in filing your claim directly to the insurer. This might help you fight for more coverage.

Work out a discount. In the eyes of the medical provider, getting some money is better than getting no money. Contact the provider and explain your financial situation. See if they're willing to lower what you owe.

What is the Medical Debt Forgiveness Act?    

The Medical Debt Forgiveness Act makes medical collections less harmful to your credit standing. It’s not a single law that passed, but rather a starting point for some changes designed to help people with medical debt. 

Here are some laws that might work in your favor:

• A medical debt can’t be reported to the credit bureaus until it is delinquent for one year. Other kinds of delinquencies are typically reported when the first late payment is 30 days past due.

• Paid-off and settled medical collection accounts will be removed from your credit history. Other kinds of collection accounts normally remain in your file for seven years, even if you pay them off.

• Medical debts under $500 won’t hurt your credit. There is no minimum dollar amount for reporting other kinds of collection accounts.

These rules give you a better chance of getting back on your feet financially. They do that by helping to protect your credit standing so that you have more options and can make the best financial decision for your situation. 

Medical debt in collections

When a medical bill goes to collections, the hospital or medical provider has handed your debt over to its collections department or an outside collections agency. This department or agency is tasked with getting money from you. They will likely reach out to you with written notices, texts, emails, and phone calls. 

While it's a most unpleasant experience being contacted by a debt collector, know that you do have rights. Under the Fair Debt Collection Practices Act (FDCPA), debt collectors may not: 

• Contact you before 8 a.m. or after 9 p.m. unless you agree to it

• Contact you after you have requested in writing that they stop 

• Harass you, treat you unfairly, or lie to you

The No Surprises Act, effective January 1, 2022, gives you even more protection. For instance, you shouldn’t get an unexpected bill for emergency services from a medical facility or healthcare provider that you had no clue was out-of-network for your plan. You can dispute the bill if that happens. You can also dispute your bill if it’s significantly higher than the estimate you were provided.

Medical debt forgiveness programs

Solutions exist for medical debt problems. If you aren't able to swing paying off that medical bill, consider these options: 

Hospital programs

Depending on the state you live in, there might be laws that require the hospital to offer need-based financial assistance. 

Each state has its own laws covering financial assistance, and the options vary greatly. For instance, you might find that you have the right to get access to:

• Financial assistance funded at the state level

• Free or discounted care 

• Payment plans 

• Discounted health care (if you're low-income) 

• Community health center (if you are in need) 

Some of this assistance hinges on your income. 

The way to find out if you qualify is to reach out to the hospital and ask what programs and resources are available. Talk to a human, explain your situation, and see what can be done. 

Charities and non-profit organizations

By law, non-profit hospitals are required to offer financial assistance programs. Further, charities such as veterans groups, local businesses and churches, and foundations can provide assistance. For instance, the PAN Foundation (Patient Access Network), Rx Hope, Patient Advocate Foundation, and the Leukemia & Lymphoma Society all might be able to help if you qualify for their program. 

There are typically income limits and geographical restrictions to qualify for medical debt forgiveness or financial assistance.

Government programs

As a rule, the government doesn’t offer free funds to people struggling with medical bills. However, special programs crop up now and then. Since the start of the COVID-19 pandemic, the Department of Veteran Affairs (VA) has refunded or canceled about $1 billion in copayments for over 1.5 million veterans in need. Further, the American Rescue Plan (ARP) has knocked out all out-of-pocket medical costs for veterans who were enrolled in VA healthcare. 

Beyond this pandemic-related assistance for veterans, there is no federal medical debt forgiveness program. Even so, if you know you’ll need treatment in the future, you can try to line up assistance in advance. Organizations to check with include:

• Children's Health Insurance Program (CHIP), for children in families that earn too much to qualify for Medicaid but not enough to afford private health insurance

• Healthcare.gov or the health insurance marketplace for your state, to see if you qualify for low cost health insurance

• Medicaid (for people with limited financial resources)

• Medicare (for people over 65, or under 65 with certain conditions)

• Supplemental Security Income (for people who are over 65, blind, or have a medical condition that prevents working)

• Financial assistance programs from state and local agencies - find these by doing an online search for “financial assistance for medical debt in [your state or county]”. The best resources will have a .gov address.

Resolve your medical debt with a debt resolution program

An affordable way to resolve outstanding debt is to go with a pro. Choose a professional and reputable (won't charge fees until you succeed) debt resolution company. You don’t need to take out a loan or have great credit to qualify.

The Achieve Resolution program starts with a free debt evaluation to determine eligibility. Our expert team will learn about your situation and develop a personalized plan to help you break free from that suffocating medical debt.

Here’s how it works if you choose to enroll:

• Make a single monthly payment into a dedicated program account that is used to save funds for settlements

• Achieve debt resolution experts negotiate with creditors on your behalf

• Settle your debts, one by one, for less than what you owe

60% of Achieve members resolve their first account within three months. So it might not be long before you start seeing results, too.

Yes, you can get rid of medical debt. With the right plan, dedication, and support system, you can tackle this challenge head-on and put medical debt in the past.

Other alternatives to medical debt forgiveness programs 

Medical debt forgiveness isn’t always possible, but you can tackle your debt and improve your financial situation in other ways. Here are two options to consider: 

Debt consolidation loan

With a debt consolidation loan, you use the money from one loan to pay off multiple smaller debts. If you pay off higher-interest debt with a lower-interest consolidation loan, you could save money on interest charges. 

A debt consolidation loan could simplify your medical debt payoff and relieve stress by replacing multiple monthly payments with a single payment. 

This might be a strategy to consider if you’re keeping up with payments but you want to give yourself some breathing room. The single monthly payment is often lower than the total of all the required monthly payments on the debts you want to clear with the consolidation loan.

Achieve's personal loans are simple and fast and can be a smart choice if you want to consolidate your debt. You might qualify for an interest rate discount if you use most or all of the funds to directly pay off creditors. You can set your payment date to best suit you, and you get to choose your own payment terms—two, three, four, or five years. 

Home equity loan

If the amount you owe on your current mortgage is less than the value of the home, you might be able to borrow against your home equity to pay off your medical debt. 

A home equity loan is also called a second mortgage. Your home is collateral against the loan, just like with a primary mortgage. Collateral is a guarantee that protects the lender. If you don’t repay the loan you could lose the collateral. This is normal for secured loans like mortgages and car loans. A major perk of home equity loans is that the interest rates tend to be lower compared to other types of financing. A home equity loan could be a solid way to pay off your medical debt. 

Solutions are out there for your medical debt. It's best to understand exactly what medical debt collections mean for your credit and financial situation and see what medical debt forgiveness options and other debt solutions you might qualify for. You got this!