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How to manage your medical debt during the coronavirus outbreak

How to handle bills with your provider or in collections.

The coronavirus outbreak delivered a double-blow to 5.4 million Americans who lost their jobs and health insurance at the same time. If you've had to make the devastating choice between your physical and financial health, you're far from alone.

Act as soon as you get a bill you know you can't repay — the sooner you reach out the more options you have. In some cases, you might even be able to cover the entire cost with hardship programs and coronavirus assistance. Reducing your debt once it reaches collections is possible, but difficult.

6 options if your debt is with your health provider

You have a lot more flexibility to negotiate medical bills you can't afford when they're still with the provider. Taking some — or all — of the following steps can help you pay off that debt before it affects your credit.

Ask about hardship programs

Some healthcare providers offer hardship programs to low-income patients. In fact, nonprofit hospitals are legally required to have these programs, which are also sometimes called a financial assistance policy or charity care. If you qualify, your provider may reduce your medical bill. In some cases, it might entirely forgive your medical debt.

Eligibility for hardship programs varies depending on the provider. In some cases, you must be eligible for Medicaid. In others, you'll need to submit a laundry list of documents, such as recent tax returns. But the extra work might be worth the savings.

Set up an installment plan

Many medical providers also offer installment plans to help patients pay off large bills, usually without interest. This could be a good option if you can't qualify for a hardship program but also don't have the means to pay off your bill in full.

In some cases, the monthly amount and term are based on your income. In others, it might be broke up over a set amount of years or you might choose a set amount to pay each month — such as $25 or $50.

Often, you can find information about your installment plan options in the fine print at the bottom of your medical bill. Otherwise, reach out to your healthcare provider to learn about your options.

Run it through insurance again

Think you aren't being fairly covered, according to your health insurance plan? Mistakes happen. Ask your insurance company to review the bill again to make sure it didn't improperly process the claim, and ask if you need further documentation or an updated billing code from your healthcare provider. You might have more coverage than your insurance provider originally found.

For example, your doctor may have tagged a routine visit with the wrong billing code for a non-routine visit because you asked about a new medical concern, or you may find that not all the tests your doctor ordered were covered by your insurance. You might be able to work with your doctor to fix an incorrect billing code, or at the very least understand your coverage better for future doctor visits.

Sign up for Medicaid

If you lost your job, or took a pay cut at the beginning of the outbreak, you may be eligible for Medicaid. Medicaid doesn't just cover future medical bills. You can also use it to cover eligible bills from the past three months. But you must have been eligible for Medicaid coverage during the time you want to cover.

You can typically find out if you're eligible for Medicaid and how to use it for past bills by visiting your state's health department website.

Apply for financial aid

Many sates, local governments and private organizations have financial aid programs for people struggling with medical debt. And there may be more programs than before, especially if you need help covering coronavirus treatments. Often, the most options are available to people who are treating a disease, like cancer or cystic fibrosis.

Find out about options available to you by contacting your local health department or even your healthcare provider. If you were a patient at a hospital, it could refer you to a social worker to walk you through your options.

Get an itemized bill

An itemized bill tells you exactly what you're being charged for. If there are services, tests or other lines that don't reflect your visit, contest it to bring your costs down. This is particularly useful if you owe money for an urgent care visit or a trip to the emergency room.

4 options if your debt is in collections

Once your healthcare provider sends your debt to collections, your choices become more limited. You might want to take some or all of the following steps.

Dispute the debt

Think a claim got sent to a debt collector by mistake? You can dispute it. You have 30 days after your medical debt goes into collections to dispute the charge in writing.

After the collector receives the dispute, it must pause collections to verify the debt before it contacts you again. If your debt collector doesn't stop contacting you before verifying the debt, you can file a complaint with the Consumer Financial Protection Bureau (CFPB).

Set limits to how the collector can make contact

Fielding constant calls from debt collectors is unfortunately common. But you have the right to tell a debt collector how and when they reach out to you. For example, you can request that a debt collector only contact you by mail. Or, if you're disputing the debt, you can request they don't contact you at all until the dispute is resolved. You can also ask collectors to hold off on contacting you until a specific date.

Request an installment agreement

When your debt collector has a legitimate claim but you don't have the means to pay off the debt now, they may be willing to work out an installment agreement with you. However, not all debt collectors are willing to do this — especially if the statute of limitations is coming up on your debt.

If you do sign up for a payment plan, make sure to get it in writing. This will make it more difficult for it to change your agreement or resume collections before the repayment plan is up.

Work with a credit counselor

Credit counseling agencies are nonprofits that specialize in helping people struggling with debt repayments. If you're not sure where to start or are having trouble dealing with your debt collector, a credit counselor can walk you through your personal options. Often, they can help you negotiate a payment plan if you were unable to do it yourself by signing up for debt management.

Our top pick: National Debt Relief

  • Min. Amount: $7,500
  • Requirements: Must have a legitimate financial hardship which is preventing the ability to pay creditors and a minimum of $7,500 in debt.
  • No cancellation fees
  • Low minimum to enroll
  • No upfront fees

Our top pick: National Debt Relief

Get back on your feet with a top-rated debt relief company that works with multiple types of debt.

  • Min. Amount: $7,500
  • Requirements: Must have a legitimate financial hardship which is preventing the ability to pay creditors and a minimum of $7,500 in debt.

Government restrictions on wage garnishment

While your creditors can in some cases take part of your wages to pay off the debt, there are limits to how much. The federal government restricts how much debt collectors can garnish, thanks to Title III of the Consumer Credit Protection Act. They can only take the lessor of the following:

  • 25% of your weekly earnings
  • 30 times the federal minimum wage, or $217.50

Some states also have additional restrictions on how much your creditors can garnish. For example, Alabama protects up to $1,000 in wages per paycheck, which benefits low-income residents of that state. And some like Colorado may have also frozen debt collections during the coronavirus outbreak. You can find out how you're protected you by contacting your state attorney general's office.

How to handle debt from coronavirus treatments

Insured individuals are charged around $38,221 on average for a hospital stay caused by the coronavirus, according to Fair Health. Uninsured individuals pay even more — around $73,300 on average. Out-patient treatment can also be pricey even if your insurer waives some copayments.

Like any medical debt, you are able to negotiate costs after you receive treatment for the coronavirus. Examine your medical bills and request an itemized copy if you haven't been provided one. Ensure that the treatment you received is correctly listed and for the correct amount. Contact your insurance company to confirm that it processed everything with the write codes. And if everything is correct, see if your medical provider offers payment plans.

Coronavirus financial relief

If your income has been impacted by the coronavirus outbreak, you might be eligible for a wide range of financial assistance programs. For example, many health insurance companies are waiving costs associated with the coronavirus.

Banks, lenders and even utility companies are offering financial assistance, which could make room in your budget for medical bills. Read our guide to COVID-19 financial assistance for more details about your options.

Compare personal loan options

If you're struggling to cover your bills, a personal loan might be able to help — if your debt isn't already in collections. It breaks up the cost into manageable monthly repayments, at a lower rate than you'll find on most credit cards. If you signed up for a loan through your healthcare provider, refinancing your with another lender might get you a better deal.

Select your credit score range and your state to see what options are available to you.

Name Product Filter Values APR Min. Credit Score Loan Amount
Best Egg personal loans
5.99% to 29.99%
$2,000 – $50,000
A prime online lending platform with multiple repayment methods.
SoFi personal loans
5.99% to 18.85%
$5,000 – $100,000
A highly-rated lender with competitive rates, high loan amounts and no fees.
Upgrade personal loans
5.94% to 35.97%
$1,000 – $50,000
Affordable loans with two simple repayment terms and no prepayment penalties.
Credible personal loans
2.49% to 35.99%
Fair to excellent credit
$1,000 – $100,000
Get personalized rates in minutes and then choose an offer from a selection of top online lenders.
Upstart personal loans
7.68% to 35.99%
580 or 600 depending on state of residence
$1,000 – $50,000
This service looks beyond your credit score to get you a competitive-rate personal loan.

Compare up to 4 providers

How to avoid coronavirus collections scams

Scams have been on the rise across the board since the start of the coronavirus. Here's how to avoid getting caught up with an illegitimate company:

  • Avoid robocalls. The Federal Trade Commission (FTC) has warned that scammers are using robocalls for a wide range of illegal purposes. The best way to avoid this is to avoid picking up calls from up numbers you don't recognize.
  • Talk to the debt collector. Speaking to someone in person can help you confirm that the debt really is yours and that you're working with a legitimate company.
  • Know your rights. Reach out to your state attorney general's office to make sure it's not illegal for debt collectors to contact you during the coronavirus outbreak.

If you think you've been a victim of a scam, you can file a complaint with the FTC, CFPB and your state attorney general's office.

Bottom line

There are multiple ways to reduce or break up the cost of your medical bills — especially if you've been impacted by the coronavirus outbreak. Stay up to date on the latest news and resources by visiting our coronavirus hub.

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