Got COVID-19 Medical Debt? 4 Things to Do Now

There are ways to pay your medical bills without ruining your credit or driving you deeper into debt.

Nearly every American is feeling the effects of coronavirus in one way or another, but few are struggling as much as those who have had to be hospitalized for the disease.

The average COVID-19-related hospital bill tops $20,000, according to the Kaiser Family Foundation, with over $1,300 of this being out-of-pocket costs. That's a tall order for families who have lost their steady source of income, and things could be even worse for patients who experience complications or those without health insurance.

You may be tempted to charge your medical debts to a credit card so you don't owe the hospital, but that could land you in even greater financial trouble. Try the following tips instead to take care of your COVID-19 medical debt without straining your finances even further.

1. Look over your bill

The first thing you should always do when you receive a medical bill is to look it over and make sure everything is accurate. It's possible, especially in these hectic times, that the hospital could make a billing error, like charging you for a service you didn't actually receive or charging you twice for a single service. That could result in a bill that's larger than what you owe.

If you have any questions about the bill you've received, reach out to the hospital for clarification before you pay anything. You can also try contacting your health insurance provider if you feel something should've been covered that wasn't. If there is indeed an error in your bill, request a corrected copy.

2. Use your health savings account if you have one

Health savings accounts (HSAs) are a special type of bank account where you keep money for medical expenses. Money you put in an HSA reduces your taxable income this year, and if you use it to pay for medical costs, your withdrawals will not be subject to tax, either. Only those with a high-deductible health insurance plan -- one with a deductible of $1,400 or more for individuals or $2,800 or more for families -- may contribute to an HSA, but you may still use your existing HSA funds, even if you no longer have a qualifying insurance plan.

It's to your advantage to use your HSA, if you have one, for medical bills you incur due to COVID-19. If you've been putting money into it regularly, you may have enough to cover your out-of-pocket costs. And even if you can't pay for it all, you will still be able to reduce your outstanding medical bills, which will make the next steps a little easier on your wallet.

3. Negotiate a payment plan with the hospital

Many hospitals allow you to set up a monthly payment plan if you're not able to pay your hospital bill all at once. This gives you additional time to pay down your medical debt so you don't have to charge it to a credit card and risk ruining your FICO® Score. You might also be able to negotiate your balance if you feel you were overcharged. You may even get a discount simply by asking. It's easier to do all of this before your account becomes delinquent, so don’t delay.

It's still a good idea to pay some of your medical bill up front if you're able to, as it shows you're sincerely trying to pay it back and reduces your outstanding balance. Talk to your hospital to see what kind of payment options it offers and whether one of them would be a good fit for you.

4. Consider a personal loan

A personal loan can be a more affordable alternative to credit card debt if you're unable to pay your medical bills or work out some type of payment plan. Personal loans can still have high interest rates, but those rates are fixed, and you'll have regular monthly payments, so you don't have to worry about your balance swelling over time.

Your monthly payment will depend on the interest rate you qualify for, which is determined by your credit score and how much you borrow. Compare quotes from a few different personal loan providers first to see which one offers you the best deal. Keep in mind that you may have to pay an origination fee, which often comes out of the money your lender gives to you.

Medical debt can be stressful, especially now, but you have options. Follow the steps above to pay down your medical debt without placing your family's long-term financial security at risk.