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How to Finance Medical Expenses

Dana George
By: Dana George

Our Loans Expert

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Financing medical expenses can be tough. Right in the midst of the stress of a health issue, you have to wonder how you will pay for the care you need. In fact, millions of Americans are one medical emergency away from financial ruin. If you have experienced a medical issue and wonder how to finance medical expenses, read on to find out what routes you could take.

What options do I have to pay my medical bills?

The energy you spend worrying about medical bills is energy you need to focus on getting well. No, the bills won't magically disappear. But as long as you are proactive, they don't have to take over your life. If you're trying to finance your medical bills, here are a few options:

Health insurance

If you are fortunate enough to have health insurance (at least 27 million Americans do not), it should be your first line of defense against high medical bills. If possible, present your medical card before treatment to avoid any confusion. If your medical situation is not an emergency, call your insurer to find out how much of your expected treatment will be covered and how much you will be out of pocket.

Health savings accounts

If you have a high-deductible health insurance plan, you may have either a health savings account (HSA) or flexible spending account (FSA). Both allow you to save money in a tax-free account and use those funds to pay for medical expenses. While it's never fun to drain an account you've spent months building, HSAs and FSAs are a great way to knock out an unexpected medical expense.

Credit card

Paying medical costs with a credit card is rarely a good decision. It only makes sense if you snag a 0% intro APR promotional rate and pay the card off in full before the promotional rate expires.

Medical credit cards

Medical credit cards are similar to credit cards. However, there are two key differences. Firstly, medical credit cards can only be used to pay for medical services. Each card type is accepted within a specific network of providers. Second, medical cards usually offer deferred interest. You may get 0% interest for a set period of time, but unlike a 0% intro APR credit card, that interest can still come back to bite you. If you don't pay the debt in full within the deferred interest period, you'll need to pay the remaining debt plus all the interest that's accumulated.


Do you have money put away in an emergency fund? Is your savings account healthy? It often makes most sense to pay a medical bill with those funds. However, only use this method after you have negotiated with the provider for a lower price.

Personal loan

Personal loans can be an effective way to finance your medical expenses. They're especially good for those with a credit score high enough to land a low interest rate. Look for monthly payments you can afford. In some cases, that might mean stretching the loan term over a longer period. That's okay.

If you're wondering whether personal loan payments could fit your budget, use the below calculator. It'll show you the different monthly payments for various emergency loan amounts, loan terms, and interest rates.

Financing medical expenses: Personal loan calculator
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Help from a community service provider

Search online for "assistance programs in (your county)" to find a list of programs available to residents of your area. If you don't find anything helpful, contact a local social service agency and ask for advice.

What to know before you choose how to finance your medical bills

There are two primary things to know before financing your medical bills:

  1. You may be able to negotiate. Millions of Americans have no medical insurance. Millions more are underinsured. Medical providers receive calls from patients every day asking to negotiate their bills. You are not alone. Good news: The billing department may be your greatest ally. It may be able to discount your bill, walk you through the steps you need to take for bill forgiveness, help you to set up a payment plan, or point you toward an agency that could help.
  2. Medical bills are not always correct. With all the coding that goes into a final statement, it is possible that someone entered the wrong code, entered a code more than once, or made another mistake. As boring as it is to go over a medical bill with a fine-tooth comb, it is essential that you do so. If something looks wrong, circle it. Don't be afraid to ask the provider for more information.

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How to finance your medical expenses

Life is about being practical, which can be frustrating when it comes to unwanted bills. Ask yourself these questions before making a decision regarding financing:

  • Do I expect to be off work for long? If so, what other bills take priority?
  • Was this a one-time event? Can I expect more of the same kinds of medical expenses?
  • Do I (or will I soon) qualify for Medicare or Medicaid?
  • What are my options? What loan terms can I qualify for and how much can I afford to pay each month?
  • What are the alternatives if I cannot pay?

These questions can help point you in the right direction. For example, if you will be off work for months undergoing chemotherapy or other intensive treatment, making sure you have a roof over your head and can eat should take priority.

Alternatives to financing medical bills

If your insurance is not adequate to pay your medical bills and paying cash is out of the question, here are a few alternatives to financing:

Financial aid from the medical facility: Most medical facilities, particularly nonprofit ones, have a charity care program designed to reduce or cover medical bills for those in need. Do not be shy about asking. Again, it's the people working in the billing department who tend to have their ears to the ground.

Payment plan through medical provider: Ask about monthly payments. Be honest about how much you can afford to pay and do not cut your budget short. Let's say your son broke his arm, and you received a statement for $1,200. Before calling, you decide that you can afford to pay $50 per month. You explain your situation and ask for a discount. The medical provider cuts the amount owed down to $1,000. By paying $50 per month, you'll have the debt paid off in 20 months. This is common, so never feel shy about asking.


Coronavirus hardship loans

Medical bills can be especially hard to cover if you're unemployed. But if you lost your job because of the pandemic, you might qualify for a coronavirus hardship loan.

These loans can help you pay for medical or non-medical expenses. You can use the loan to pay rent, buy food, pay off medical bills, or cover other essential costs. If you're facing financial hardship because of the pandemic, this type of loan could help you make ends meet.

For more information, read our guide to getting a coronavirus hardship loan.

Bankruptcy: If worse comes to worst, you can file for bankruptcy protection. It's one of the few ways to stop debt collection calls and completely wipe out medical debt. The downside? Bankruptcy stays on your credit report for at least seven years. It can impact everything from getting a loan to qualifying for the job you want.

A medical emergency is never an expected expense. But with a little careful financing, you can work toward both physical and financial health.

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