What to Do About Medical Debt

Medical bills are a leading source of debt in the US. Unlike most debts, they are often negotiable and sometimes wrong.

1. Check the bill

• Ask for an itemized bill with billing codes.
• Compare with your insurer's explanation of benefits.
• Look for duplicate charges, services you did not receive, and out-of-network charges that should have been covered.

2. Challenge insurance problems

If insurance denied the claim, appeal. Most health plans must offer internal appeals and external review (HealthCare.gov). See insurance claim denials. Federal law also protects patients from many surprise out-of-network bills for emergency care and certain services at in-network facilities.

3. Ask for financial assistance

Nonprofit hospitals must have a written financial assistance policy, limit charges for eligible patients, and make reasonable efforts to determine eligibility before taking extraordinary collection actions such as lawsuits or credit reporting (26 U.S.C. 501(r)). Apply even after a bill goes to collections; many policies allow retroactive help.

4. Negotiate

• Ask for a self-pay or prompt-pay discount.
• Request an interest-free payment plan you can afford.
• Avoid putting medical bills on high-interest credit cards or medical credit cards with deferred interest unless you can pay them off in the promotional period.

5. If the bill goes to collections

Collection agencies must follow the FDCPA: validation notices, dispute rights and limits on harassment (FTC). Dispute errors in writing. See what debt collectors can legally do.

Credit reports

In 2025 a federal court in Texas vacated the CFPB rule that would have barred most medical debt from credit reports (Brownstein). The three major credit bureaus have had voluntary policies not to report paid medical collections or medical collections under $500, and some states have their own laws, though the same ruling questioned whether state limits are preempted. Check your reports and dispute errors.

If you are sued

Respond before the deadline; see what to do if a debt collector sues you.

Bankruptcy

Medical debt is unsecured and generally dischargeable in Chapter 7 or Chapter 13. See Chapter 7.

A bankruptcy lawyer or legal aid office can help when medical debt is overwhelming.

Sources

1. Cornell Law School LII: 26 U.S.C. 501(r), Requirements for charitable hospital organizations
2. Brownstein: Federal court vacates CFPB's medical debt rule
3. HealthCare.gov: Appealing a health plan decision
4. Federal Trade Commission: Debt collection FAQs