Healthcare Repayment Plan

What is the minimum monthly payment you can make on your medical bills?

Every month, millions of Americans struggle to pay their medical bills. Rather than reach out to ask for help, many believe making a minimum monthly payment, often as low as $5, is all that’s needed to stay in good standing with their health care provider and stay out of collections.

Making a minimum payment without an agreement from your health care provider, however, will not guarantee your doctor’s billing office won’t send your account to collections.

Thankfully, there are options that will show you how to pay off medical bills, even if they move into collections. Third-party patient advocate services like BuoyFi will take the time to analyze your financial obligations, including your household income, recommend an affordable payment plan, and provide coaching on how to best approach debt negotiations with your care provider or collection agency.

What happens when I don’t pay medical bills?

Medical debt can be overwhelming. Many people choose to ignore the debt altogether, hoping that it will simply go away. That’s understandable, considering the mental and physical stress medical debt can cause when you can’t afford to pay.

There are benefits to taking action, even if it’s a bill you can’t afford. Like credit card debt, unpaid bills can result in late fees, which continue to add to the total balance owed. And while many health care providers don’t report medical debt to credit bureaus, third party collections agencies may use credit reporting for consumers who don’t make an effort to find more affordable ways to pay off the debt.

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Should you be worried about medical debt that goes to collections?

Patient out of pocket deductibles, copays, and other patient responsibilities represent a growing percentage of revenue and ensure hospitals and doctors can continue to provide quality care. Credit reporting is one approach collections professionals use to encourage patient engagement on unpaid bills – an important first step to identifying billing errors, potential charity care eligibility, and more affordable settlement and payment plans. Once debt collectors report the debt, it will become part of your credit report and potentially impact your credit score. A low credit score can affect your loan approval chances, as well as make any loan you are approved for more expensive with higher interest rates and fees. Working with the Consumer Financial Protection Bureau (CFPB), the three credit bureaus have established new guidelines around reporting medical debt, including not reporting medical debt for the first year, removing any paid medical debt immediately from credit reports, and as of March 31, 2023, not credit reporting medical debts that are less than $500.
How does medical debt affect your credit score?
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What percentage of medical bills go to collections?

Half of all Americans have medical debt, according to data, and 50% say their medical debt is in collections. Left unpaid, this debt can remain on your credit report for up to seven years, and debt collectors may continue efforts to collect the amount owed.

However, credit bureaus must remove the debt from your report when you pay the debt, and many collections agencies will help you set up a payment plan to pay off the debt and resolve the negative filing on your credit report.

Before any of that happens, you should first reach out to your health care provider. Explain your financial situation and let them know you want to pay your debt, then ask for help. Because they know it can be difficult to pay off medical debt, your provider will make every effort to help you find an affordable option that works for your budget.

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How to pay for medical bills you can’t afford

Whether you are speaking with your primary care doctor’s office, or a major health care system’s billing office, trust that both of them want to find a payment solution that you can afford. “We understand that unusually high medical care costs may create a financial hardship for other patients,” a Columbia University Irving Medical Center representative recently explained in a story featured in The Atlantic. “We try to set up payment arrangements that are within their financial means.”

Before reaching out to your provider, experts recommend taking time to review your medical bills, check for accuracy, and consider the payment options available. But that can be as overwhelming for those struggling with medical debt as the debt itself. Tools like the BuoyFi Calculator, which can help you determine if you may be eligible for debt reduction, will recommend affordable settlement and payment plans based on your income.

Simply having a plan that works for you will boost your confidence and make negotiating with your provider or collections agency more comfortable.

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What is the least I can pay to settle my debt?

Payment options include everything from interest-free monthly payments based on your financial ability, to prompt-pay discounts, and debt reduction plans. Some of the more common financial assistance plans include:

  • Personalized payment plans: Based on your individual financial situation, personalized plans provide people with low monthly payments that fit their budget. Your recommended solution could differ from someone in a similar situation. Every situation is different, and most providers take this into account. The challenge for patients becomes the length of time necessary to pay off the debt. The longer the debt lingers, the more likely someone is to stop making payments, take on additional credit card debt, or require additional medical care, thus making the payment even more difficult.
  • Prompt-pay discounts: Can discount your total bill by 5% to 20% if you promise to settle the debt within a specified time. Some health care systems offer prompt-pay discounts only to uninsured or underinsured patients. Contact your provider to determine your eligibility.
  • Debt reduction and settlements: Many providers and collection agencies will agree to reduce your overall debt total if you agree to either a one-time payment or a time-bound plan, typically 24 months or less. These plans are open to most patients who need them.
  • Personal loans and medical credit cards: These payment options have pros and cons, so be sure to understand the terms before signing up. Personal loans may be a good option for consolidating multiple debts into one low payment, but they may have higher interest rates and fees than what’s available from your care provider. Medical credit cards often offer zero-interest financing for medical procedures, but not all procedures are covered, and failing to pay the balance within the zero-interest terms could put you on the hook for additional interest and fees.
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How do I make sure I can pay my medical bills in the future?

As you pay down your medical debt, you can start planning for the cost of future medical procedures, both planned and unplanned. Getting started is not as hard as you might think.

First, review your budget to make sure you are focusing first on existing debt. Then, reach out to your employer to see whether the plan offered by your insurance company includes a Flexible Spending Account (FSA), a Health Savings Account (HSA) – or both.

HSAs and FSAs are financial tools that allow you to save for qualified medical expenses, tax-free. The biggest difference between the two is that you control your HSAs, and some of your contributions may roll over year to year depending on Plan option. For example, employers control FSAs, and therefore FSA funds must be used before the end of the year.

One limitation of HSA and FSA savings is that they can only be used for qualified medical expenses. Many patients struggling with medical debt are regularly balancing a variety of payments and need more flexibility in how they can spend their savings. Tools like BuoyFi Savings could be a solution. It rounds up every purchase to the nearest dollar and saves the difference in an account you can use to make payments on any debt.

You may also consider enrolling in a secondary insurance program.  Secondary insurance will make payments toward your healthcare expenses after your primary insurance has paid.  If you have a chronic medical condition or know you will need medical care for an extended period, secondary insurance may significantly reduce the expense associated with your healthcare services.

It’s also worth exploring whether you qualify for Medicaid , Medicare, or Veterans Assistance. While Medicare is the U.S. federal health insurance plan for Americans age 65 and older, people under 65 with certain disabilities or conditions also qualify. Medicaid is a joint federal and state program that provides health coverage to people with limited income.

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Is there someone I can talk to that will help me through the process?

Most health care systems can pair you with a Patient Financial Advocate, or medical bill advocate, who will help you navigate the ins and outs of health insurance benefits, Medicaid, pharmaceutical assistance programs, and medical debt assistance programs.

We’re here to help too! Buoy’s Concierge team offers a suite of tools, educational content, and free counsel on how to resolve your medical debt, identify plans you can afford to pay, steer clear of future financial hazards, and save for whatever expenses are on the horizon.

Ready to take the first step? Download the BuoyFi app today.