Whether we’re facing a global pandemic like COVID-19, or just trying to cover the cost of needed routine care, medical bills can be a serious source of debt. A study from the Centers for Disease Control and Prevention found 14.2% of families struggled with medical bills in 2018. While a separate study by Salary Finance found 28% of those with medical debt owe $10,000 or more.

Unpaid medical bills can cause big problems, such as persistent collections calls and damage to your credit.

Fortunately, there are ways to find relief. Here are a few FAQs about how medical bills impact your credit, along with several resources you can tap if you need help with medical bills.


Can medical bills affect your credit score?

Missing payments on these bills, just like others, can affect your credit score. Either the original medical provider or the collections agency can report a “trade line” to the major credit bureaus. A trade line describes your account’s status and would designate the account as being in collections.

“Failure to pay a bill affects the biggest portion of your credit scores: payment history. Consequently, having a medical bill in collections will probably result in serious damage to your credit scores,” writes NerdWallet.


Can medical bills be sent to collections?

If your bills are unpaid, the hospital or medical provider typically hires a third-party agency to collect the amount due. As the Consumer Financial Protection Bureau explains, collections practices vary widely: “Assignment of unpaid medical bills to third-party debt collectors can even occur when the bills are only 60 or even just 30-days past due.”

It’s important to note that unpaid bills are often sent to collections automatically. For example, if you’ve negotiated a six-month payment plan with the hospital, your bill could still be sent to collections after 90 days—even if you haven’t missed a single payment. The creditor has discretion to send any unpaid balances to collections.


How can you get help with medical bills?

Whether your credit score has already taken a hit or you’re working to keep a bill from falling into collections, these options can help you take control of your medical debt:


Negotiate: Hospitals and insurance companies would rather you pay them something rather than nothing at all, so it’s worth asking if you can negotiate a lower bill or payment plan. Increase your chances of success by following best practices recommended by U.S. News & World Report, including keeping precise records and thoroughly understanding your insurance policy.

If you don’t understand the charges on your bill or feel overwhelmed by the amount you owe, ask to speak with a counselor or representative from the billing department who can explain the costs and walk you through your options.


Request a discount: If you can’t pay your bills right now but expect to have the money within the next month or so, ask if you’ll receive a discounted rate in exchange for scheduling a lump sum payment.


Contact nonprofit and private groups: Dozens of charities, foundations, and religious organizations offer financial aid and grants to help families facing steep medical costs. If you are affected by a specific condition, it can help to research charities focused on that ailment—like the American Kidney Fund, for example.

Nonprofit debt management companies often provide free consultation sessions to determine whether they can help you streamline your debt. They may be able to negotiate your medical debt and get you onto a manageable payment plan in which you make one payment a month that they distribute to providers for you.


Apply for financial aid: Many hospitals are not-for-profit organizations, meaning they legally must provide care to all people, regardless of financial condition. Hospital financial aid programs typically offer discounts based on income, according to federal poverty levels. Ask the hospital’s billing department about available financial aid and the application process.


Set up a crowdfunding campaign: Websites such as GoFundMe offer platforms for fundraising campaigns, allowing you to reach out to friends, family and your community for help with medical bills and other emergency expenses.


Medical bill loans: With an installment loan, you’ll pay back the borrowed amount plus interest by making regular payments (or installments) over a fixed period of time. A side benefit is that making on-time payments can boost your credit score. Installment loans are available from banks, credit unions and online lenders. Online loans typically have a fast application process, and you can usually get the money within a day or two.

You can also use an installment loan to consolidate your medical debt. If you currently owe on multiple medical debts, you can use the funds from the loan to pay them all off, so you have to make only one payment a month.


How to Pay Off Medical Debt Related to COVID-19

Several federal and state programs have been enacted to help people recovering from COVID-19. Whether you need testing or help paying your medical expenses, see what programs you may qualify for first.


Use government assistance: Under the recently passed federal CARES Act, many Americans will receive a stimulus check of $1,200. Your first priority should be ensuring you can afford food and your rent or mortgage payments (though if you are struggling with those expenses, financial assistance is available).

If you feel secure in those areas and have some emergency savings set aside, you can use stimulus funds to pay down medical debt.

Learn about additional government programs available at Benefits.gov or by contacting a social worker. Individual states run programs through their Department of Human Services, Department of Social Services or Health Services. CalWORKs, for example, provides money each month for qualifying families to spend on housing, food or medical care.

You can also contact your state attorney general’s office to find out about any emergency measures or relief programs enacted for medical debt. In New York, Gov. Andrew Cuomo suspended medical debt collection for at least 30 days to help people struggling with their payments amid the crisis.


Ask about insurance waivers: If you need to be tested for COVID-19 or are receiving care related to the virus, call your insurance company to ask what’s covered. Tests are free for all Americans, but some insurers are not charging copays or fees for COVID-19-related doctor’s visits and treatments. Make sure you know what you’re entitled to.

While there are ways to get help with medical bills, paying off large debts can take time. Try to remember there is a light at the end of the tunnel. As long as you keep plugging away, you’ll be able to protect your credit score and get those debts paid off.

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