Medical Debt Has Forced 23% of Consumers to Carry a Credit Card Balance

A doctor visiting a man at home who has a broken leg resting on the couch.

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Are you in the same boat?

Key points

  • A new survey reveals that medical debt can make it difficult to pay off credit cards in full.
  • It pays to take steps to avoid medical debt when possible, like negotiating with providers.

Medical debt is something many consumers are forced to deal with. Unfortunately, having health insurance doesn't eliminate the risk of accruing it.

A good 53% of U.S. consumers say the pandemic caused them to take on new medical debt, according to a new survey from Discover Personal Loans. What's even more disturbing is that among those with medical debt, 23% say they've been forced to only make their minimum credit card payments rather than pay off those balances in full.

Carrying a credit card balance can be costly when interest starts to accrue over time. It could also result in credit score damage.

And that's not the only consequence of medical debt. For some, owing too much money in healthcare bills could mean falling behind on other expenses and missing out on major goals. Plus, medical debt can be a notable source of stress.

It's for this reason that it's best to avoid medical debt when possible. Obviously, in many cases, this is easier said than done. But there are some steps you can take to either steer clear of medical debt or reduce the amount you end up with.

1. Check your insurance benefits before seeking care

Sometimes, a simple mishap on your part could lead to your health insurance company denying a healthcare claim. If you're required to obtain a referral from your primary care provider to see a specialist, for example, and you don't take that step, you could end up on the hook for a very costly bill.

That's why it's a good idea to verify your benefits before seeking care. If you can't get the information you need online, call your insurer and speak to a live representative about your specific plans and concerns.

2. Review your medical bills carefully

The people who submit medical claims on the part of healthcare providers aren't infallible. Sometimes, all it takes is a simple billing code mistake to cause an insurance claim to get rejected, leaving you with a giant bill.

Before you pay any of your medical bills, review them carefully and make sure everything looks right. If you're being charged an amount that seems off, call your provider and ask for an explanation.

Furthermore, if your health insurance company rejects a claim you expected it to pay for, dig up the associated bills and ask for an explanation of your benefits. You may find a claim was rejected due to an incorrect procedure code, and a simple correction gets you out of paying hundreds of dollars.

3. Negotiate with providers

You may, at times, incur healthcare costs you have to pay for out of pocket. If you know you'll be picking up the tab solo, speak up about it. You never know when a provider might be willing to reduce your costs or at least work out a flexible payment plan that allows you to spread out your financial obligation over a lengthy period of time.

Medical debt can be a leading cause of personal bankruptcies, and apparently, it can also lead to credit card debt. Credit card debt may not be as extreme as having to declare bankruptcy, but it's still a fate worth avoiding. It pays to do whatever you can to stay out of medical debt in the first place.

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