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If you’ve just discovered your medical bills have landed in collections, you’re not alone. Medical debt is a significant issue in the U.S. Over 20 million adults owe more than $250 in unpaid medical bills, and the nation’s total medical debt tops $220 billion. Even with insurance, high deductibles and unexpected costs can leave you struggling to pay, and nearly one in five Americans has had a medical bill sent to collections.
These debts can quickly damage your credit and add stress to an already tough situation. You can take steps to negotiate with debt collectors and potentially reduce what you owe. This article will show you how.
Before you contact a debt collector, get clear on what you actually owe. Start by requesting a detailed statement from both your healthcare provider and the collections agency. Check every charge for errors, billing mistakes are common and can inflate your balance. Make sure your insurance was applied correctly and that you aren’t being billed for services you didn’t receive. If you spot any discrepancies, dispute them right away.
Also, confirm that the debt is truly yours and not outdated or already paid. Knowing exactly what you owe puts you in a stronger position to negotiate and helps you avoid paying more than necessary.
To properly manage medical bills, it's important to identify which parts of the bill you're responsible for paying. Health insurance plans often have deductibles, coinsurance, and copayments that can impact how much you owe.
Deductibles are the amount you must pay out-of-pocket before your insurance starts covering the costs. After you've met your deductible, your insurance will begin covering a greater share of your medical expenses.
Coinsurance refers to the percentage of costs you must pay after meeting your deductible. For instance, if your plan includes a 20% coinsurance, you would be responsible for 20% of the bill, and your insurer would cover the remaining 80%.
Copayments are fixed amounts you pay for specific services, like doctor visits or prescriptions, and they may not count toward your deductible or coinsurance.
Make sure you know these details, as understanding your financial responsibility will help you negotiate with both your provider and debt collectors more effectively.
To ensure you're not overpaying or facing unwarranted charges, follow these steps to verify the accuracy of your medical bill. A careful review can help spot mistakes and clarify discrepancies. Here’s what you need to check:
Always request an official bill from your provider instead of relying on preliminary estimates. An official bill should reflect the most accurate and up-to-date charges, including any adjustments from insurance payments or discounts.
By carefully verifying each element of your bill, you can avoid paying for errors and ensure that your medical debt is accurate and fair.
If you’re struggling with medical debt, there are several ways to seek financial support. Below are the primary methods to explore, broken down into three key areas:
Many healthcare providers offer their own financial assistance programs, often referred to as charity care or payment assistance. These programs can help reduce your medical bills if you meet certain income and family size criteria.
Several government programs are designed to assist individuals and families with healthcare costs:
Additionally, The Affordable Care Act (ACA) offers subsidies for insurance premiums through the Health Insurance Marketplace for those who meet specific income requirements. Some states have expanded Medicaid under the ACA, increasing eligibility for healthcare support.
Exploring these financial assistance options can provide crucial support, enabling you to address your medical debt without additional stress.
Once your medical bill has been sent to a collection agency, the next step is negotiating a manageable payment plan or settlement. Collection agencies can be intimidating, but they are often willing to work with you to resolve the debt. Here’s how you can effectively negotiate:
Before engaging with a collection agency, make sure you're familiar with your rights under the Fair Debt Collection Practices Act (FDCPA). This law protects you by preventing debt collectors from using abusive or deceptive tactics. It also gives you the right to dispute the debt if you believe it is inaccurate or if you’ve already paid.
Confirm that the debt is valid and that the amount matches what you owe. If you spot any discrepancies, bring them up with the collector. You can request a debt validation letter from the collection agency to confirm the details of the debt, including the original creditor and the amount owed.
When you’re ready to negotiate, start by offering a lower payment than what is owed. Collection agencies often accept less than the full balance, especially if they know you're struggling to pay.
Any agreement made over the phone should be confirmed in writing. Ask the collection agency to provide a written settlement agreement or payment plan details before making any payments. This ensures you're protected if any issues arise later.
By being informed, prepared, and calm, you can successfully negotiate with collection agencies and reduce the financial burden of your medical debt.
Medical debt sent to collections can affect your credit, but recent changes have reduced its impact. As of 2025, the Consumer Financial Protection Bureau (CFPB) finalized a rule that removes medical bills from credit reports used by lenders, preventing debt collectors from using credit reporting to pressure payments and helping about 15 million Americans see an average credit score increase of 20 points.
Previously, only unpaid medical collections over $500 could appear on your credit report, and paid medical collections were removed entirely. There was also a 365-day grace period before medical collections appeared on your credit file, giving you time to resolve the debt.
These changes mean medical bills are less likely to hurt your credit score, but it’s still important to address them quickly and keep records of all payments and negotiations.
When medical bills end up in collections, Shepherd Outsourcing Collections can help ease the burden by providing personalized, stress-free solutions. Here’s how we support you:
By partnering with Shepherd Outsourcing, you gain an experienced ally who simplifies the debt collection process and helps you regain financial control.
Dealing with medical bills in collections can feel overwhelming, but understanding your rights, verifying your debt, and exploring financial assistance can make a significant difference. Negotiating directly or with the help of experienced partners like Shepherd Outsourcing Collections can reduce your debt and ease financial stress. Remember, taking action early improves your chances of a favorable outcome and protects your credit.
Ready to resolve your medical debt with confidence? Contact Shepherd Outsourcing Collections now for personalized support and effective negotiation solutions.
©2024 by Shepherd Outsourcing.