If you have emergency medical bills piling up, you may feel ashamed that you can’t afford to pay them. The consequences can lead to serious complications if they cause you to skip doctor’s appointments, tests, and prescription medications.
You’re not alone. A 2019 study revealed that 137 million adults faced financial hardship due to overwhelming medical bills. You may have other options besides depleting your savings, ruining your credit, or the possibility of bankruptcy for paying your medical bills.
If you’re in a tight spot, here are 5 ways to pay for emergency medical bills without tapping into retirement or sacrificing your long-term financial stability.
1. Negotiate Your Bill
Ignoring your emergency medical bills is the worst thing you can do. Your past-due accounts may end up in collections. Having debt collection companies call you can make the situation worse. Instead, take a proactive approach by negotiating your medical bills. You may be able to:
- Seek financial assistance
- Negotiate a lower price
Many hospitals have financial assistance programs. Whether you’re uninsured or owe a substantial amount after insurance, you may qualify for a reduction in your balance. The potential for total forgiveness of your medical debt is also an option.
You might be able to negotiate a lower price by comparing the charges you were billed to what other providers charge in your area. Consider using Healthcare Bluebook to research medical costs.
2. Ask for a Payment Plan
Most people don’t have the cash on hand to take care of big emergency medical bills. Hospitals and medical providers may offer an interest-free option to repay your bills in small payments each month. It’s one of the most common ways to repay a balance you can’t afford to pay in a single payment.
If you’re struggling to pay your balance, ask for a payment plan. It’s a great option if you don’t have health insurance or still owe a lot after your insurance has been paid.
Typically, there are no eligibility requirements to qualify for a payment plan. You may be approved even if your income is too high to take advantage of other medical financial assistance options.
With a payment plan, you can set up affordable monthly payments that fit into your overall budget. Regular payments on your medical bills can also help you avoid damage to your credit score.
3. Sell Your Home
When you have a large debt to pay on your emergency medical bills, you may have to compromise your lifestyle to come up with the money to pay them. One option is to sell your home. While putting your house on the market might not be your first choice for managing your medical bills, it’s something you may want to consider if you’re facing financial hardship.
If you’re struggling to pay your mortgage because of outstanding hospital or doctor costs, you could end up in foreclosure. It’s best to take action before you find yourself in a situation where you’re forced to leave your home.
Contact a local real estate agent to talk about options for listing your home for sale. The average home is on the market for 65 to 93 days, according to Zillow. The quicker your house sells, the sooner you can pay off your medical bills.
To sell your home faster, clean everything and take great photos. The quality of pictures on your house listing can make or break the sale since buyers usually start their search online. Another secret to getting a quick sale is to remove your family photos and memorabilia. Depersonalizing the home helps prospective buyers see it as their home, not yours.
Before you accept an offer to sell your home, make sure you have another living space lined up. Family and friends may let you stay with them for a short period if you’re in a tight spot. Otherwise, look for a less expensive place to rent until you get back on your feet.
4. Mortgage Your Home
Tapping into your home’s equity can be a quick way to get cash to pay down your emergency medical bills. Lenders don’t generally lend more than 80% of the home’s value without requiring you to buy mortgage insurance. If you owe more than 80% of the value of your home after a mortgage, mortgage insurance would be another monthly cost you must pay. If you’ve had your home for a while, it might be enough to pay your medical bills in full without worrying about mortgage insurance.
A mortgage is a relatively simple process. You could have the funds to pay off your balance in about 30 days. Using a mortgage to pay your medical debt doesn’t reduce the amount you owe. However, it can transition your big medical balances into affordable fixed monthly payments over a set period.
Keep in mind that mortgaging your home can put you at risk of losing your house if you can’t make the payments. If you increase the amount of your mortgage to pay off medical debt, your monthly payment might go up. Before considering a home mortgage, make sure you can afford to pay the monthly amount.
5. Get a Personal Loan
If the hospital or medical provider doesn’t agree to set up a payment plan, a personal loan might be one of the best options for paying emergency medical bills. Depending on the amount you owe, a personal loan may be enough to help you pay off medical debts. It can break up your large balance into smaller monthly payments.
Ask your bank or credit union if they offer loans for medical debt. Online lenders are another option to compare rates to make sure you get the best loan terms. The lender could give you a year or longer to pay back the personal loan.
When applying, you typically need to have a credit rating in the range of good to excellent. If you have a low credit score, you may not get a great interest rate. You also may not qualify for a personal loan at all. A higher credit score can make you eligible for lower interest rates. The lower your interest, the less you’ll pay over the life of the loan.
A Way Out of Emergency Medical Bills
For smaller medical balances, a personal loan might be all that you need. Selling your home might seem like a drastic measure, but it might be the best option when you owe a lot on your emergency medical bills. If you’re struggling to sell your home or if you decide that the price is not quite right to sell, you can try a sale-leaseback. With a sale-leaseback program, you get the money you need to pay off medical debts and you can continue to live in your home while paying monthly rent. When you’re ready, you have the option to buy back your home. It’s a win-win solution to medical debt.
Paying emergency medical bills can be overwhelming. However, there are options available to you during this stressful time. Talk to a financial consultant about which solution works best for you.