How To Avoid Death by Medical Expenses: Debt Settlement Options


Medical bills are the leading cause of bankruptcy in America. Many people struggle to pay off their medical bills after an unexpected illness, injury or accident, especially if they do not have health insurance to help cover their medical expenses, but even if they have a high deductible insurance plan that could leave the family exposed to having to repay $10,000 or more worth of medical bills in a single year.

If you are facing significant medical bills that you cannot repay, you might want to consider debt settlement as a way to get rid of your medical debt.


Here are a few things to keep in mind if you want to try to settle your medical debts for less than you owe. For example:

Income-Based Repayment

Ask the hospital about income-based repayment plans for your medical bills. Contact the hospital billing department, tell them that you have a financial hardship and cannot afford to repay your debts, and ask if you can pay a certain amount each month. Many hospitals might agree to accept less than the total amount of your medical debt, as long as you can make a minimum monthly payment.

Government Assistance

If you were uninsured at the time of your hospitalization or medical care, and if your income is below a certain level, you might qualify for Medicaid to cover your medical bills retroactively – even if you already incurred the medical debt, Medicaid can pay your bills if you qualify and apply within 3 months of being in the hospital. The challenge is that many people make “too much money” to qualify for Medicaid. But if you are experiencing severe financial hardship, this government program might be a possibility to help relieve you of the burden of repaying your medical bills.

Here is more information on who is eligible for benefits from Medicaid. Benefits and eligibility requirements vary by state, since different states have different income levels and guidelines, and some states are more generous than others in giving Medicaid benefits. 

SPECIAL NOTE: If you have uninsured children who have suffered an injury, illness or accident and you cannot pay the medical bills, check with your state's CHIP (Children's Health Insurance Program) to see if you can qualify to get coverage for your child. Most states have much more generous benefits for kids than for adults - so even if your family income is too high for adults to qualify for Medicaid, your kids still might be able to get insurance from the CHIP program. Go here for information on your state's CHIP program. 

Pay Cash


Many doctors and hospitals might be willing to deal with you if you can pay at least some of what you owe - even without resorting to a more elaborate debt settlement plan. For example, if you owe $5,000 to a hospital for a surgery or hospital stay, ask the billing department if you can settle the debt for a one-time cash payment of $2,000. (This is just an example – there is no guarantee that a hospital would agree to a repayment of this amount.) Hospitals might be willing to accept some cash up front, instead of waiting a long time to get repaid the full amount.

Get it in Writing

If you do decide to try to use debt settlement to reduce your medical bills, remember the first rule of law and business: “Get it in writing.” Verbal commitments from a doctor or staffer at a hospital billing office and handshake agreements are not good enough. Make sure you know what you're agreeing to. You might also want to consider working with an attorney, credit counseling agency or debt consolidation firm that can negotiate with the creditors on your behalf and help come up with a clear, precise resolution of your medical bills.

Medical bills can be stressful, but even if you’re suffering from financial hardship, there is hope to get out from under the pile of medical debt and move forward with your life. Many hospitals and health care providers will be willing to negotiate with you and work with you to arrange a decent repayment plan, especially if you make a good faith effort to pay what you can afford.

Need more help? Find out more about debt settlement and see it’s the right solution for you.