How to Manage Your Enormous Medical Bills

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Medical bills can be a major source of stress and financial strain for many people. Fortunately, there are several steps you can take to not blow up your budget when you get hit with large medical bills. In this post, we’ll explore some practical tips for managing medical expenses and staying on top of your finances.

Understanding Your Insurance Coverage

The first step in avoiding a large medical bill is to understand your insurance coverage. Before you receive any medical treatment, be sure to check with your insurance provider to find out what is covered and what isn’t. This will help you avoid any surprises when the bill arrives.

In addition, be sure to keep track of your deductibles, copays, and out-of-pocket maximums. Knowing these amounts can help you budget for medical expenses and avoid overspending.

As a cancer survivor, I know this challenge better than most. Even worse, we lost our insurance right at the midpoint in my chemotherapy treatments. Talk about STRESS! But we were able to qualify for an Affordable Care Act Plan and we were so grateful.

But you can’t just say no to treatments you need to stay alive. And our plan had an enormous deductible. So, you are going to have to pay SOMETHING, but it helps if you know exactly what you are responsible for and what all your options are.

My cancer treatment center had a Patient Advocate and I spent quite a bit of time with her to help me understand what this enormous pile of bills was all about.

Negotiating with Healthcare Providers

If you receive a medical bill that you can’t afford, don’t hesitate to negotiate with your healthcare provider. Many providers are willing to work with patients to set up payment plans or reduce the total amount due.

When negotiating, be sure to explain your financial situation and provide any documentation that supports your claim. For example, if you’ve recently experienced a job loss or major life event, be sure to share this information with your provider.

Also – VERY IMPORTANT. Review your bills carefully and question anything that seems “off”. According to a 2014 Medical Billing Advocates of America study, a whopping 80% of medical bills contain errors. These errors can include anything from incorrect billing codes to duplicate charges.

If you think you see an error on a medical bill, the best course of action is to contact your healthcare provider or insurance company as soon as possible. You may want to start by reviewing your Explanation of Benefits (EOB) statement, which should provide a detailed breakdown of the charges and payments related to your medical care.

When you contact your healthcare provider or insurance company, be sure to explain the issue and provide any supporting documentation, such as receipts or medical records. Ask them to investigate the issue and provide you with a corrected bill or EOB statement.

It’s important to follow up with your healthcare provider or insurance company until the issue is resolved. If you’re unable to resolve the issue on your own, you may want to consider working with a medical billing advocate or healthcare attorney who can help you navigate the billing process and advocate on your behalf.

Using Healthcare Savings Accounts

Another way to manage medical expenses is to use healthcare savings accounts, such as a Health Savings Account (HSA) or a Flexible Spending Account (FSA). These accounts allow you to set aside pre-tax dollars to pay for medical expenses.

If your employer offers a healthcare savings account, be sure to take advantage of it. Not only can it help you save money on medical expenses, but it can also help you reduce your taxable income.

The only drawback is that some of these plans are of a “use it or lose it” nature, so make sure you understand the limitations of the plan and track your expenses carefully to make sure you aren’t going to have to buy $500 worth of band-aids to avoid losing your money.

Here’s a helpful article from Forbes Magazine to help you understand how these two plans work.

Seeking Financial Assistance

If you’re struggling with medical debt, don’t hesitate to seek financial assistance. Many hospitals and healthcare providers offer financial assistance programs to help patients who are unable to pay their bills.

To find out if you qualify for financial assistance, be sure to contact your healthcare provider and ask about their policies. You may be required to provide proof of income or other financial information to determine your eligibility.

Here’s what you DON’T WANT TO DO – Don’t put the your medical expenses on a credit card. Not only will you be paying higher interest rates, but in most cases, medical debt is not reported to the credit bureaus, even if you default or miss payments.

In general, payment plans with medical providers typically have lower interest rates than if you were to put the debt on a credit card. Medical providers may offer payment plans with little or no interest, while credit cards typically have interest rates that can range from 15% to 30% or more.

There are pros and cons to putting medical debt on a credit card. One advantage is that credit cards can be used to pay off medical bills quickly, which can help you avoid late fees or collection calls. In addition, some credit cards offer rewards or cash back programs that can help you offset the cost of medical bills, but you’d have to have a really good interest rate to make it work.

Second, putting medical debt on a credit card can negatively impact your credit score if you’re unable to make timely payments or if you max out your credit card. This can make it harder to get approved for credit in the future and can result in higher interest rates on loans and credit cards.

Overall, if you’re unable to pay off your medical bills in full, it’s usually best to work with your healthcare provider to set up a payment plan. This can help you avoid high interest charges and negative impacts on your credit score. If you do decide to use a credit card, be sure to pay off the debt as quickly as possible and avoid maxing out your credit card to prevent further financial strain.

Staying on Top of Medical Bills

Finally, the best way to avoid getting hit with a large medical bill is to stay on top of your medical bills. This means reviewing your bills carefully, keeping track of payments, and following up with your healthcare provider if you have any questions or concerns.

I once spent about 4 hours one day just sorting out all my medical bills. I prefer good old fashioned paper bills because I can match up the doctor bills with the insurance statements, make sure I’m paying the correct amount, and then staple the electronic receipt as confirmation. Then I know exactly what I owe and what I’ve paid.

BONUS TIP: I had our Financial Advisor set up a separate medical account for my husband and I and we pay EVERYTHING medical using this debit card – premiums, co-pays, medications, and incidentals. And nothing else is allowed to go on that card.

So, come tax time, all I have to do is go in and print off the history from that account, and all our medical expenses for the year are documented for our taxes! Smart, huh?

If you notice any errors or discrepancies on your bill, be sure to contact your provider immediately to have them corrected. Ignoring medical bills or putting them off can lead to late fees, collection calls, and other financial problems.


Medical bills can be a major source of stress and financial strain, but there are several steps you can take to manage your medical expenses and avoid getting hit with a large bill. By understanding your insurance coverage, negotiating with healthcare providers, using healthcare savings accounts, seeking financial assistance, and staying on top of your bills, you can take control of your healthcare finances and avoid financial stress.

Other Resources for You to Look Into

Check out my freebie page. I have a video that will show you exactly how to pay off $500 worth of debt within 30 days with some easy tweaks. I also have a handy guide to help you control your impulse spending on Amazon, Target, and other places where you frequently overspend.

Check out my debt-free coaching page. I've helped hundreds of people save thousands of dollars in excess interest charges using simple Dave Ramsey-like strategies. It's simple, affordable and personalized to your unique financial situation.

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