While covering your medical debt with a credit card may seem like a fast way to make the debt go away and protect your credit, you might be better off taking the time you need to contact your provider and explore repayment options. Also, if you are in a challenging position and have to pause payment on your medical debt, you can rest assured that this type of debt is handled differently on credit reports. <\/p>\n\n\n\n
Medical Debt is Treated Differently on Credit Reports<\/h2>\n\n\n\n
Medical debt is given less weight on a credit report which means it doesn\u2019t impact your score like other debt. The three credit bureaus (Fico, Experian and Transunion) also give a grace period for this type of debt by waiting 180 days before adding it to your credit report. This can give you the time you need to work with your healthcare provider and explore your options with a medical debt tackling checklist. <\/p>\n\n\n\n
Medical Debt Tackling Checklist<\/strong><\/p>\n\n\n\n Completing this checklist is an important first step in tackling your medical debt, especially if the bills are more than you can afford. Check your statements for accuracy and follow up with your provider regarding your debt repayment options. These small steps can save you money long-term and help keep medical debt off your credit cards. Remember, if your bills are not consolidated, you may have to contact multiple billing departments and address the following: <\/p>\n\n\n\n Confirm that your bill is accurate and explore discount, interest-free repayment, and income-based repayment options. Then you can look into other repayment strategies like a debt consolidation loan. This approach can help you keep medical debt off your credit cards. <\/p>\n\n\n\n A study conducted by Medical Billing Advocates of America showed that 8 of 10 medical bills reviewed contained errors<\/a>. If you don\u2019t catch the mistakes, you could end up paying or going into debt for more than you should owe. <\/p>\n\n\n\n Look for:<\/p>\n\n\n\n Persistently negotiating for a discount is one of the best ways to bring down your medical debt balance. The process involves patience and a lot of time on the phone, but it usually works. Vox Journalist Sarah Kliff has interviewed a dozen emergency room patients who successfully got their bill reduced through negotiation<\/a>.<\/p>\n\n\n\n Successful negotiations often involve calling multiple times and usually require you to escalate the call to a supervisor.<\/p>\n\n\n\n \u201cMartha Shea told me about negotiating down her husband\u2019s $12,000 bill for emergency surgery in Jacksonville, Florida. The first time she called, the surgeon\u2019s office agreed to knock 15 percent off the bill. Then she kept calling, each time asking if they would consider offering a discount. Each time, a few hundred dollars disappeared.\u201d<\/p>\n\n\n\n The process is time-consuming but can help you knock hundreds or, in some cases, thousands of dollars off of your bill.<\/p>\n\n\n\n Call your healthcare provider\u2019s billing department and see if they allow patients to make multiple, interest-free payments on the bill. If you have the funds on hand, saving on interest payments can make a significant difference over time. <\/p>\n\n\n\n Ask about any income-based discounts, such as a sliding fee scale based on your earned income. If you are reasonably sure your bill is accurate and you\u2019ve gotten as much of a discount as possible, income-based repayment can help you manage the rest of your debt. <\/p>\n\n\n\n A debt consolidation loan can quickly pay off multiple medical debts and simplify your bill to one monthly payment. This method is best suited to people who have healthy credit scores and qualify for low-interest rates.<\/p>\n\n\n\n In the United States, one serious medical emergency could cost you tens of thousands of dollars or more. Having insurance helps, but depending on the voracity of your plan, you could still be on the hook for substantial medical debt. <\/p>\n\n\n\n While it\u2019s not possible to fully prepare for unexpected emergencies, you can give yourself a head start by keeping your finances healthy. The best way to navigate upfront expenses during a medical situation is with an emergency fund or health savings account. <\/p>\n\n\n\n Keep your debt-to-income ratio<\/a> low and pay your bills on time to keep your credit score healthy. This will make it easier to consolidate medical debt. Maintain an insurance policy to keep your out-of-pocket costs as low as possible. <\/p>\n\n\n\n Stay on top of your day-to-day expenses and budgeting, so reorganizing your finances during an emergency will be less confusing. <\/p>\n\n\n\n Prepare for a Medical Emergency<\/strong><\/p>\n\n\n\n If you are older or have a history of health issues, you may also wish to appoint a financial power of attorney. This is usually a spouse or close family member, or friend you trust to manage your finances if you are incapacitated. If this approach is right for you, creating a budget and instructions for your financial proxy to follow is an excellent first step. <\/p>\n\n\n\n When you\u2019re sick or injured, struggling with medical debt can take focus away from your health and cause added worry and stress. If you have completed the medical debt checklist and are still financially overwhelmed, debt consolidation could help.<\/p>\n\n\n\n Medical debt consolidation<\/a> can help you lower your monthly payment. Contact a Consolidation Specialist<\/a> to find out if you qualify.<\/p>\n\n\n\n\n
1. Check Your Bill for Errors<\/h2>\n\n\n\n
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2. Negotiate for a Discount<\/h2>\n\n\n\n
3. Request an Interest-Free Payment Plan<\/h2>\n\n\n\n
4. Ask for Income-Based Repayment Plan<\/h2>\n\n\n\n
5. Pay Off Medical Debt With a Consolidation Loan<\/h2>\n\n\n\n
Preparing for the Unexpected<\/h2>\n\n\n\n
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Solutions for Medical Debt<\/h2>\n\n\n\n
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