Medical debt is unlike most other consumer debt in a few important ways. It is usually not a choice in the way that taking on a credit card balance is a choice. It can arrive without warning and in amounts that are difficult or impossible to predict. And the rules around how it is reported, collected, and resolved are different from other types of debt, including some recent changes that benefit consumers significantly.
Before you pay anything, ask for an itemized bill
Medical billing errors are common. Research has found billing errors in a significant proportion of hospital bills, including duplicate charges, charges for services not received, and incorrect coding that affects the amount insurance covers. Before paying a large medical bill, request an itemized statement showing every service and its cost. Compare it against your insurance explanation of benefits if you have insurance. Dispute any charge you do not recognize or that appears duplicated.
Negotiate before it goes to collections
Most hospitals and many medical practices will negotiate the amount owed if you ask directly and before the account goes to a collections agency. The negotiation can go several ways. You can ask for a financial hardship discount, many nonprofit hospitals are required to offer charity care programs and will reduce or eliminate bills for qualifying patients. You can ask for a payment plan with no interest. You can sometimes offer a lump sum settlement for less than the full balance, particularly if the account has been outstanding for some time. The worst they can say is no.
Charity care and hospital financial assistance
Nonprofit hospitals, which make up the majority of US hospitals, are required to have financial assistance programs as a condition of their tax-exempt status. These programs can reduce or eliminate medical bills for patients who meet income eligibility requirements, which are often more generous than people expect. A household earning up to 200 or even 300 percent of the federal poverty level may qualify for significant assistance at many hospitals. Ask the billing department about their financial assistance program by name and request an application.
How medical debt affects your credit report
As of 2023, the three major credit bureaus changed their rules around medical debt reporting. Medical debt under $500 is no longer included in credit reports. Medical debt that has been paid is removed from credit reports. Unpaid medical debt is now given a one-year grace period before it can appear on a report, giving patients more time to resolve billing disputes or make payment arrangements. Additionally, as of 2025, a new CFPB rule would have removed medical debt from credit reports entirely, though the legal and regulatory status of that rule may have changed. Check current guidance before assuming it applies.
Medical debt is stressful in a way that is distinct from other financial problems because it often arrives during an already difficult period. Knowing the options available, itemized billing review, charity care programs, negotiation, and the updated credit reporting rules, can reduce both the financial impact and the feeling of helplessness that tends to accompany a large unexpected medical bill.