3 Ways to Protect Yourself from Medical Debt
Medical debt is a pervasive issue in the US for both insured and uninsured patients, affecting a staggering 41% of American adults. Unlike other forms of debt, medical debt is extremely hard to avoid; nobody chooses to get sick, have an accident, or need emergency care.
With healthcare costs soaring and many Americans struggling to save even $1,000 for an emergency, it’s no surprise that the total national burden of medical debt has skyrocketed to as much as $220 billion.
But it doesn’t have to be this way. If you’re worried about medical debt, here are three ways you can help reduce your risk of debt.
#1: See if you qualify for financial assistance at the hospital
Most hospitals offer free or discounted care for patients based on income, known as “financial assistance.” In many cases, patients with household income at or below 400% of the federal poverty level (almost $130,000 for a family of four) could be eligible for a discount on their medical services. However, these programs are not always well-advertised, and many patients miss out because they don’t know that assistance is available or how to apply. While the extent of assistance varies depending on the hospital, all nonprofit hospitals are required to publish their financial assistance policy on their website. It’s worth the effort to compare estimated prices at different hospitals–your choice in where you get care could save you thousands of dollars.
Related article: 5 Things Every Patient Should Know About Hospital Financial Assistance →
Know your rights! Hospitals are also prohibited by law from taking extraordinary collection actions unless they have previously made reasonable efforts to confirm that you are not eligible for financial assistance. However, some hospitals still issue large bills without doing their due diligence.
#2: Request an itemized bill and ask questions
Errors in medical billing are more common than many realize. Upon receiving a medical bill, request an itemized statement detailing all charges. Then review the listed services and procedures to ensure they were actually provided and that there are no duplicate charges. If you identify discrepancies or are confused by anything, contact the billing department and ask for an explanation.
#3: Negotiate your bill with the hospital
If you’re facing a medical bill that you can’t afford, hospitals are often willing to negotiate. So inform them of your financial constraints and ask if they can offer more manageable payment arrangements. For example, they could reduce the total amount owed or offer a payment plan that better fits your financial situation. In some cases, offering to pay a reduced amount as a lump sum can lead to significant discounts.
BONUS ITEM: Support policy solutions aimed at reducing medical debt
Medical debt is a bipartisan issue and legislators across the country are working on solutions. Many states are relieving medical debt outright for large groups of people through partnerships with groups like Undue Medical Debt. Some states have implemented minimum requirements on who is eligible for financial assistance and how much hospitals must spend on free and discounted care.
One promising solution is a requirement for patient screening, in which hospitals have to check certain patients to see if they are eligible for assistance before billing them or sending their debt to collections. For example, in Oregon, any patient who is uninsured, insured through Medicaid, or owes at least $500 after insurance must be screened for financial assistance before they receive a bill.
Other important state actions include expanding Medicaid, limiting collection actions such as lawsuits, liens, wage garnishments, or reporting medical debt to credit agencies; limiting interest on medical debt; requiring reasonable payment plans; limits on charges for uninsured patients, and more. Check your state’s policies to see if you’re protected.
The Bottom Line
While medical debt remains a significant challenge, there are strategies that can help you avoid or minimize it. At the Lown Institute, we believe hospitals should do more to ensure patients receive the care they need—without the burden of medical debt. Stay informed, know your rights, and don’t be afraid to advocate for yourself!
Learn more about Lown’s research into hospital financial assistance policies and join us at our in-person conference on medical debt on May 15, 2025 in Washington, D.C.