It is critical to understand your rights when negotiating repayment of medical debt. Your first step is to ensure that the debt is one that you owe. Then you'll need to work through negotiating with the debt collection agency or the medical care provider to help you navigate the process moving forward.

Medical debt can be frustrating and overwhelming, but there are several steps you can take to lessen the load and reduce what you owe.

Understanding Your Medical Debt

The first step to handling medical debt is understanding the charges on your bill. Given that these bills can be complex, don't hesitate to ask the debt collection agency or the biller for clarification. Here are the critical components of your medical bill to consider:

• Provider Charges: This is the fee that your healthcare provider sets for the services they've provided.
• Allowed Charges: This is the maximum amount your insurance company will cover for a service, as indicated in your Explanation of Benefits (EOB). The healthcare provider receives this amount for the services rendered.
• Paid by Insurer: This amount reflects what your insurance company has paid towards your medical debt. It is not part of your obligation.
• What You Owe: This is the remaining balance after your insurance company has covered its part. Often called the patient balance, it is what you're responsible for paying.

If you find any discrepancies in these details, your initial action should be to contest the charges with the provider. The provider is obligated to confirm the accuracy of these details before they can proceed with debt collection.

Negotiation Strategies

You can then work with the provider or debt collection agency to reduce what you owe. For example, consider these negotiation strategies at this point:

• If the debt is yours, but you do not have the financial ability to pay the debt, tell the organization that. Tell them what you can pay.
• Compare your debt to others paying for the same service. You can research the typical cost of the service from other providers to see if there is any evidence of overcharging.
• Ask for a discount now if you pay the balance of what you owe upfront. That could help you to save money overall.

Sometimes, the best step you can take is to ask the medical provider at the time of care for a reduced fee for the needed services. They may be able to offer this to you later, too, after the care, if you are honest with them about your financial need.

Payment Assistance and Options

There may be additional strategies you can take to pay your medical debt and get the debt provider to work with you. Consider the following.

Payment Plans

Payment plans are widespread methods for repaying medical debt. You can expect your medical provider or the debt collection agency to work with you on these. Be upfront and clear about what you can afford to pay each month. Ask them to reduce anything they can, remove late fees, or allow you to pay the debt over time without interest. Some may allow this if you set up automatic payments to the collection agency.

Reduced Settlements

If you have cash on hand, contact the medical provider for a reduced settlement. That is a method in which you will tell the collector what you can pay now and ask that they consider that payment as payment-in-full, meaning it resolves the debt you owe.

A reduced settlement reduces what you owe immediately. Still, often it means that you must have the financial means to make that payment now. If you do not do so, they may not be able to reduce what you owe. Keep in mind that it's critical to make a wise decision here. It may be a good thing to pay off that medical bill for less but don't if it means you'll miss payments on other financial obligations like rent, mortgage, or car payments.

Legal Action and Bankruptcy

Medical debt can quickly become hard to control, especially when the medical condition is complex and long-term. You can file bankruptcy to request that the court forgive your debt, a process called discharging the debt. That would mean you do not repay it.

There are bankruptcy risks, and it will damage your credit. You will find it harder to obtain loans for the next 7 to 10 years while it remains on your credit report.

Verifying Debt and Disputes

Always work to verify any debt that you owe. If you are unsure of what you owe, dispute it with the medical provider. If you are unsure of the accuracy of the debt, don't simply pay it. Instead, work with a financial provider who can better understand your situation and offer solutions.