Up to 100 million Americans struggle with medical debt in 2025, according to the White House. What’s more, health insurance costs, which can help control medical costs, are getting more expensive: The price went up 7% year over year in 2025, and 6% the year prior.
If you’re facing financial challenges due to medical debt, learn some options here.
Key Points
• At least tens of million Americans are currently struggling with medical debt.
• Health insurance costs rose 7% year over year in 2025.
• Payment plans and negotiation can make medical debt more manageable.
• Nonprofit advocates and credit counseling organizations offer assistance with debt.
• Personal loans can consolidate medical bills, potentially reducing interest rates.
How Much Do Americans Spend on Healthcare Each Year?
Many people receive health insurance through an employer. And even though employers generally help pay for a portion of the costs, the financial burden can still be significant. A typical household spends $513 per month — or $6,159 per year — on healthcare expenses, according to the U.S. Bureau of Labor Statistics Consumer Expenditure Survey. This includes routine things such as health insurance costs, doctor’s visits, medications, and medical supplies. That reflects an uptick of 7.3% year over year.
How Many Americans Struggle With Medical Debt?
Despite employer-sponsored health plans covering some of the costs, some Americans struggle to pay their medical bills.
In fact, estimates as of early 2025 range as high as 100 million Americans — or almost one in three people — struggling with medical debt. Other surveys say the number is closer to 20 million, which is still quite a high number.
Lower-income earners, Black Americans, those with chronic illnesses, and those between ages 35 and 64 typically have the most debt. As you might guess, medical debt can increase with age.
What Happens If Medical Debt Is Not Paid?
Even if you’re facing an overwhelming amount of medical debt, the worst thing to do is ignore it because you don’t have the cash in your bank account. Depending on the state where you live, a medical provider might charge you a late fee for bills not paid on time and may even charge interest if payments aren’t made at all.
After a few months, if medical bills go unpaid, the provider might choose to pass the debt over to a debt collection agency.
If the medical provider does decide to give the debt to a debt collection agency, the debt might immediately appear on the debtor’s credit report and affect their credit score. The debt collector will take steps to collect the bill. If the debt is not collected, the provider may take it even further and take legal action.
While U.S. laws don’t allow debtors to be imprisoned for unpaid debts, they could face another consequence, such as wage garnishment. If the case goes to court and a judge rules in favor of the medical service provider, there’s a chance the debtor’s wages could be garnished. In simple terms, this means that payment will be taken out of their paycheck and sent to the provider. This means less money will turn up in your checking account and can make paying bills more challenging.
4 Medical Debt Relief Options
While there are no one-size-fits-all solutions to help ease the financial burden of medical debt, the following tips for paying off outstanding debt may be worth considering. It’s also a smart move to contact a professional before taking any action.
1. Medical Debt Payment Plans
Because healthcare services are often costly, contacting medical providers to ask if they offer payment plans might be one plan of action to consider. Some medical providers may offer payment plans to pay off debt in installments instead of paying it off all at once, which might make the debt more manageable.
2. Negotiating Medical Debt
It may feel counterintuitive or inappropriate to negotiate medical bills, but some providers actually expect it. While it may seem awkward at first, negotiating medical bills can help make them more manageable. Additionally, negotiating may even help avoid a credit score ding, or worse, getting sued.
For starters, reaching out to the provider’s billing department directly to see if negotiation of medical debt is possible might be an option. Many providers have financial departments that can determine if patients qualify for discounts or reductions. Remember, when negotiating, try to be as polite as possible. But it can be helpful to be persistent, too.
Another point to remember is that providers may favor cash. So those who can afford to make a lump sum payment might consider asking if the provider offers a discount for a cash payment.
Recommended: What Is Considered a Bad Credit Score?
3. Working With a Nonprofit Advocate
If the medical bills keep piling up, it may be worthwhile to consider finding a nonprofit advocate or reputable credit counseling organization that offers assistance with managing money and debts, creating a budget, and providing resources to help consumers pay off the debt that’s dogging them.
Certified counselors that have been trained to help individuals create a plan to solve financial concerns can be found through the U.S. Department of Justice. These organizations offer counseling and debt management plans and services.
One solution credit counselors may suggest is a debt management plan. These plans may help the borrowers get their debt under control.
With one type of debt management plan, the borrower makes a lump sum payment to the credit organization, and then the organization pays the creditor in installment payments. If you decide to go this route, make sure not to confuse a credit counseling nonprofit organization with a debt settlement company.
In contrast to credit counseling nonprofits, debt settlement companies are profit-driven. They negotiate with creditors to reduce the debt owed and accept a settlement — a lump sum — that’s less than the original debt. However, these companies can charge a 15% to 25% fee on top of the debt settled. While some of these companies are legitimate, consumers are cautioned to be wary of scams.
Some deceptive practices include guarantees that all of a person’s debts will be settled for a small amount of money, that debtors should stop paying their debts without explaining the consequences of such actions, or collection of fees for services before reviewing a person’s financial situation. Researching a company’s reputation can be done through the state attorney general’s office or the state consumer protection agency.
4. Using a Personal Loan
Using a credit card to pay off medical bills doesn’t help anything when you’re trying to reduce your overall debt. Taking out a personal loan could be a way to streamline multiple bills into one monthly payment.
Consolidating medical debt might include a number of benefits. It could help you get a fixed monthly payment and, potentially, reduced interest rates.
It’s important to compare rates and understand how a new loan could pay off in the long run. If your monthly payment is lower because the loan term is longer, for example, it might not be a good strategy, because it means you may be making more interest payments and therefore paying more over the life of the loan.
Recommended: Emergency Fund Calculator
The Takeaway
If you’re steeped in medical bills, you’re hardly alone. While dealing with the debt may not be pleasant, it’s a task you shouldn’t ignore. Otherwise, you may end up with your credit score being negatively impacted or your debt being passed along to a collections agency.
Fortunately, there are some debt relief options you may want to consider. Examples include exploring debt payment plans, negotiating the debt with your provider, enlisting the help of a nonprofit advocate, or taking out a personal loan to help pay off the bills. Having the right banking partner, such as one with favorable interest rates and low or no fees, can be a smart move too.
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
FAQ
Is there debt forgiveness for medical bills?
Some hospitals offer debt forgiveness, or what may be called charity care, for certain patients.
How can you handle medical bills you can’t afford?
Options can include negotiating your bill, requesting a payment plan, working with an advocate, looking into debt repayment plans, or taking out a personal loan.
Can you negotiate medical bills after insurance?
Yes, it is a common practice for patients to negotiate the remaining balance after insurance with their healthcare provider’s billing office. Politely explaining your situation and asking for discounts or an accommodation is a path to consider.
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