How to manage medical debt: 7 Steps to take when you can’t afford your medical bills

Key takeaways

• Ensure your medical bills are correct and you’ve explored assistance options before considering taking on debt.
• Consider your entire financial picture before committing to any lending product.
• Depending on your situation, a balance transfer, HELOC, or personal loan may be the right option.
• Professional debt management is an important step for large or complex debt.
• Ask for help early so you can create a plan before any debt gets worse.

For many Coloradans, an unexpected medical bill can quickly become a financial burden. And changes in healthcare coverage are adding new pressure.

Approximately 575,000 Coloradans have lost Medicaid coverage in 2024, according to Jennifer Leosz, board member of the Local Change Foundation and chief integrated health officer at Clinica Family Health and Wellness. As Medicaid changes evolve, it’s important to be prepared.

If medical bills are putting pressure on your budget, addressing them early can give you more options. The important thing is to understand what you owe, what assistance may be available and what repayment strategy realistically fits your finances.

What should you do if you can't afford a medical bill?

If you can't afford a medical bill, start by reviewing the bill for accuracy and asking the provider about financial assistance or payment plans. 

Then, look at your income, expenses, and other debts before deciding whether options such as debt consolidation or financing make sense. Most importantly, don't ignore the bill. Addressing it early may give you more options.

1. Make sure your medical bill is correct

Before worrying about how you're going to pay, make sure you understand what you're being charged.

• Review bills and insurance explanations.
• Ask questions about charges you don't recognize.
• Confirm that your insurance was billed appropriately, if applicable.
• Determine whether surprise-billing protections may apply.

State and federal laws protect Coloradans from certain surprise medical bills, including most emergency services and certain out-of-network services received at an in-network facility.

2. Ask about financial assistance before taking on new debt

Before reaching for a credit card or loan, contact the medical provider.

Ask whether they offer:

• Financial assistance
• Payment plans
• Other programs based on your income or circumstances

The Consumer Assistance Program from the Colorado Consumer Health Initiative helps Coloradans navigate hospital financial assistance programs, surprise medical bills, insurance claims, and payment plan negotiations.

3. Understand your entire financial picture

If you're dealing with medical debt, you might also be dealing with credit card debt, missed payments, or a lower credit score. Any loss of income also needs to be considered. Take time to understand your debt-to-income picture before determining what options may make sense. 

A financial services guide at Elevations can easily walk you through your financial picture. Many of our branch staff are also certified credit union financial counselors (CCUFCs).

Practical exercise

To get a holistic view of your finances, list your:

1. Medical debt

2. Other debt balances

3. Interest rates

4. Minimum monthly payments

5. Monthly take-home income

6. Essential expenses

7. Amount realistically available for debt repayment

Make an appointment

4. Be careful about moving medical debt onto a credit card

Paying off a medical bill with a credit card doesn't eliminate your debt. It changes the type of debt you owe. Consider the credit card's interest rate, required payment, and how long repayment could take.

Bill Camping, a branch manager at Elevations, points out that if you transfer your debt to a credit card with a high interest rate, it may just reduce your available income and potentially make it more difficult to qualify for other financing later.

Use our free online calculator to estimate your monthly payment after transferring your balance to another calculator.

Calculate balance transfer payments

5. Compare options for managing medical debt

There isn't one right solution for everyone. The appropriate option depends on how much you owe, your overall debt load, income, your credit, and how quickly you can reasonably repay it.

Low intro-rate credit card

This is a potentially useful option for a manageable balance if you qualify for a low rate and you're confident you can repay it during the introductory period. Multiple Elevations credit cards have multiple low introductory annual percentage rate (APR) options.

Personal loan

A personal loan is another option to evaluate for consolidating or restructuring debt, depending on qualification, rate and terms. Before committing to a personal loan or credit card, use our free, online calculator to preview your debt consolidation payments at different interest rates.

Home equity lending

A home equity line of credit (HELOC) secures your funds with the equity in your home. This is a possible option if you have equity in your home and are confident you can repay your loan. Because your home is involved, it's important to fully consider your options. You can estimate your HELOC with our free, online calculator.

Debt management or financial counseling

For larger or more complicated debt situations, professional financial counseling may be more appropriate than another loan.

Through GreenPath Financial Wellness, a debt reduction program offered for free to Elevations members, you can talk with an NFCC- or HUD-certified financial counselor and create a plan to pay off your debt over time.

6. Make a repayment plan you can stick with

Repayment can take multiple years, but creating a plan is better than avoiding debt altogether. Make a realistic plan, not a perfect plan that becomes challenging to maintain. Here are three steps you can take to create a repayment plan:

1. Talk with a financial advisor to find the borrowing strategy that makes the best sense for your personal situation. Talk about lower interest credit cards and loans.
2. While reviewing your monthly budget, decide on a sustainable monthly payment. Avoid committing so many funds to the debt that you won’t be able to cover necessities.
3. Reevaluate the plan as your circumstances change.

You can also create this plan with the help of a debt repayment professional.

7. Don't let embarrassment keep you from asking for help

If you’re dealing with medical debt, it can be difficult to know where to start. Many people face similar financial challenges, and avoiding the situation can sometimes make it harder to manage. Taking small steps to understand your options can make the path forward feel more manageable.

Recognizing that you are not alone and that you have support is the first step. The next is to talk with a trusted financial advisor who can help you assess your finances and create a plan.

By talking about your medical debt with a trusted financial advisor, you can make a plan early instead of allowing it to get worse.

You don't have to figure it out alone

Medical debt can feel overwhelming, but you don't have to solve everything at once. An Elevations financial solutions guide are empathetic, caring, and helpful people to help you look at your complete financial picture, understand your options, and start building a realistic plan. Make a branch appointment to talk through these issues in-person. Or, explore debt management resources offered for free to Elevations members.

Commonly Asked Questions

• What should I do first if I can't afford a medical bill? 

  Review the bill, determine whether insurance or billing issues need to be addressed, and ask the provider about financial assistance and payment options before taking on additional debt.

• Can you negotiate medical debt?

  Discuss available financial assistance and payment plan options with the provider. Colorado Consumer Health Initiative helps consumers navigate payment plan negotiations and hospital financial assistance programs.

• Should I pay medical debt with a credit card?

  Not automatically. Compare the rate, terms, and realistic repayment timeline first. Turning a medical bill into high-interest credit card debt can create a different financial problem.

• Can you consolidate medical debt? 

  Debt consolidation may be an option depending on your overall financial situation. Elevations' debt-consolidation calculator helps you calculate balances, rates, payments, and consolidation scenarios.