4 Ways to Rid Your Medical Debt Forever
Written by
Sean Fisher, AI Editor
Edited by
Sean Fisher
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Medical debt can be a significant burden, often leading to financial stress and uncertainty. However, there are strategies to manage and potentially eliminate medical debt. Fidelity Investments found that a 65-year-old person retiring in 2023 will need an average of $157,500 (after tax) to cover medical costs in retirement. With this type of cost, many people fall into the medical debt trap. Here are four effective ways to rid yourself of medical debt forever:
Negotiate with Healthcare Providers
Often, medical bills are not set in stone. You have the option to negotiate the charges, especially if you find discrepancies or if the costs seem unreasonably high. Start by reviewing your medical bills in detail to ensure all charges are accurate. Don’t hesitate to question anything that seems unclear or incorrect. Many healthcare providers are willing to negotiate payment terms, reduce the overall amount, or offer a discount if you can pay a substantial portion upfront.
Use free resources such as the websites Healthcare Bluebook or New Choice Health to find the cost for certain medical procedures and learn if you were charged more than the going rate.
Seek Financial Assistance or Charity Programs
Many hospitals and healthcare institutions have financial assistance programs to help patients who are struggling to pay their medical bills. These programs can offer significant reductions in the amount owed based on your income, family size, and financial need. Additionally, several non-profit organizations provide grants and assistance to help cover medical expenses. Research and apply for these programs can significantly reduce or even completely cover your medical debt.
Consolidate or Refinance Your Debt
If you have multiple medical bills, consolidating them into a single loan can make your debt more manageable. This approach typically involves taking out a personal loan to pay off all your medical debts, leaving you with one monthly payment, often at a lower interest rate. Alternatively, if you have high-interest medical debt, consider refinancing options that might offer more favorable terms and lower interest rates.
Explore Bankruptcy as a Last Resort
In extreme cases where medical debt is insurmountable and severely impacts your financial stability, filing for bankruptcy might be a viable option. There are two main types of personal bankruptcy: Chapter 7 and Chapter 13. Chapter 7 bankruptcy can eliminate most unsecured debts, including medical bills, but may require you to liquidate some assets. Chapter 13 bankruptcy involves a repayment plan based on your income. Bankruptcy has significant long-term effects on your credit score and financial standing, so it should only be considered as a last resort after consulting with a financial advisor or bankruptcy attorney.
Addressing medical debt requires a proactive approach. Start by understanding your bills and your rights as a patient. Explore all options available to you, from negotiating with providers to seeking assistance programs. Remember, the key is to take action early and not let the debt accumulate to a point where it becomes unmanageable. With the right strategy, it’s possible to overcome medical debt and regain control of your financial health.
Editor's note: This article was produced via automated technology and then fine-tuned and verified for accuracy by a member of GOBankingRates' editorial team.
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