How Do Medical Bill Payment Plans Work?

Healthcare worker at home visit

If you've recently received medical care or have a procedure planned, you may be wondering how to pay your bill. If you can afford to pay it in full, you can simply make that payment and move on.

But if the bill is too high for your budget, you may be able to pay using a medical bill payment plan. Here's what you need to know about medical bill payment plans and how to take advantage of them to stay on top of your finances.

Are There Payment Plans for Medical Bills?

Medical bill payment plans allow the patient to pay off what they owe for a service over time rather than in a lump sum. The arrangement can vary, though, depending on the health care provider and the type of service.

Acute Care

Acute care is short-term treatment typically associated with medical emergencies and other urgent health matters, often performed in a hospital. "Acute care providers treat you and then ask for payment later," says Matt Baltzer, product management director for Experian Health. "So in the acute care setting, it is common to have no-interest plans that have really generous terms."

In this scenario, patients typically make arrangements for payment directly with the health care provider. There's also no credit check involved because you're not financing anything ahead of time—the service has already been completed.

Elective or Semi-Elective Procedures

If you're planning a non-emergency procedure in advance, Baltzer says financing options can get a little fuzzier. "If it's a clearly scheduled visit and elective to some extent, providers will ask for all or part of that to be paid upfront," he says. "In that type of scenario, you've got the opportunity to drive for an upfront payment plan."

Health care providers typically don't offer these upfront payment plans, however. Instead, you may need to apply for financing through a third-party provider, such as CareCredit. These payment plans generally aren't interest-free, but they're often cheaper than using a credit card.

In fact, some health care providers partner with third-party financing companies to make procedures more affordable to patients on a referral basis.

"Elective procedures are profitable for health care providers, whether it's a LASIK surgery, weight management surgeries, orthopedic, skin or fertility," Baltzer says. "So the provider will pay a fee that basically buys down the interest rate to make it more attractive to you."

While some providers may offer referrals, you can also find financing options on your own. One thing to keep in mind, though, is that these financing options are typically subject to credit approval, so you may have a hard time qualifying if your credit isn't in great shape.

How to Pay for Medical Expenses When Money Is Tight

Getting on a medical bill payment plan won't guarantee that you'll be able to afford to pay off your balance. If you need more help paying medical bills, there are a few options you can consider.

For starters, request an itemized bill if you don't already have one, and review it for double charges or for services that you didn't receive. Also, make sure your insurance company paid everything it was supposed to—depending on how health care providers code services, it may not get covered even if it's supposed to be. Check your benefits and call your insurance provider if you think a service or procedure should have been covered. When you talk to your insurance company, be sure to note who you talked to and what exactly was discussed.

If you can reduce your bill through these efforts, it could make a huge difference. If they don't solve your problem, however, there are some other ways to get help paying your medical debt.

Consider reaching out to government programs. For instance, you may qualify for Medicaid, which provides free or low-cost medical benefits to those who don't make a lot of money. If you have kids, you may also be able to apply for the Children's Health Insurance Program (CHIP), which will cover them for medical and dental care until they reach age 19.

Also, look to companies and nonprofit organizations for assistance programs. Some examples include:

Additionally, many states have laws that limit how much a hospital can charge if a patient's income meets low-income criteria based on the poverty guidelines for that state.

How Hospitals Are Helping Consumers With Medical Bills

Personalized payment plans are the primary way hospitals and other health care providers assist patients with medical bills. The use of these plans has increased significantly in some organizations and is present in 1 in 5 outstanding patient accounts, according to Experian Health.

However, if you're having a hard time even with a payment plan, hospitals have an incentive to help you pay your medical bills and may offer more help.

"With consumers that are really in a difficult financial situation," Baltzer says. "Most providers—particularly nonprofit providers, but even some for-profit providers—offer financial assistance programs." This assistance often comes in the form of a discount, he adds.

So if you have medical bills and you're struggling to get by, don't hesitate to reach out to your health care provider to find out if relief is available.

This is especially true if you don't have insurance coverage. "If someone is truly uninsured, [they'll receive] a discounted rate," Baltzer says.

Avoid Letting Your Medical Bills Go Unpaid

Even if you don't think you can pay your medical bills, try not to stop making payments altogether. If you leave your bill unpaid for too long, it could impact your credit.

Most health care providers work with what they call bad debt agencies if your bills go unpaid for a while, say 90 days, Baltzer says. So at that point, you may start getting calls from another company looking to collect the amount that you owe.

If your medical debt is over $500 and still isn't paid a year after it first became past due, the collection agency can report it to the credit reporting agencies, and it could damage your credit score. So the sooner you reach out to your health care provider, the better. So the sooner you reach out to your health care provider, the better.