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How to Get Medical Debt Forgiveness

Forgiveness for medical bills can be difficult to obtain, but there are many programs that can provide other forms of assistance.

Written by Ben Luthi / September 15, 2022

Quick Bites

  • The only federal program that offers medical debt forgiveness is limited to veterans.
  • Many organizations and hospitals provide financial assistance with medical bills, particularly for low-income patients.
  • Depending on your situation, you may be able to pursue other opportunities to obtain relief for your medical debt.

Medical debt affects more than 100 million Americans, including 41% of adults, according to a report by Kaiser Health News and NPR. Roughly 1 in 5 adults with medical bills don't expect to be able to pay them off.[1]

In March 2022, the Consumer Financial Protection Bureau (CFPB) reported that 58% of all debt in collections in 2021 were medical bills, prompting some changes to how the credit bureaus treat medical debt (more on that below).[2]

But that doesn't change the fact that the debt still exists, prompting some to look for some form of relief. Medical debt forgiveness may be an option for some, but it's not easy to obtain, and it's not always without caveats. Here's what you should know.

Inside this article

  1. How medical debt relief works
  2. Ways to obtain medical debt help
  3. Medical debt and your credit

How does medical debt forgiveness work?

There's only one government program that provides medical debt forgiveness. The U.S. Department of Veterans Affairs offers full forgiveness of medical debt for veterans experiencing financial hardship.[3]

While other federal government programs won't necessarily help with existing medical bills, they can help reduce your costs. If you have a low income or have reached a certain age, you may qualify for subsidized health care or insurance premiums through Medicaid or Medicare, the Children's Health Insurance Program or the health insurance marketplace.[4]

Below are some other ways to get help with past and upcoming medical expenses. 

Hospital-based assistance

Some states require hospitals to provide some form of financial assistance to low-income residents. These states include[5]:

  • California

  • Connecticut

  • Illinois

  • Maine

  • Maryland

  • Nevada

  • New Jersey

  • New York

  • Rhode Island

  • Washington

Additionally, the Affordable Care Act requires certain nonprofit hospitals to do the same. Contact your health care provider to see whether you're eligible for some form of assistance, which may include discounted or free care.[5]

"Even if the provider doesn't offer such a program, you may be able to negotiate a reduced balance or arrange a manageable payment plan," says Leslie Tayne, a debt attorney and founder of Tayne Law Group.

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Organization assistance

There are several organizations that offer help with medical bills, though it's generally in the form of assistance and not forgiveness. Depending on your situation, here are some organizations that can help:

  • CancerCare: Can provide assistance with your co-pays if you're undergoing cancer treatment.

  • HealthWell Foundation: If you're underinsured, you may be able to get help with expenses related to chronic and life-altering diseases.

  • Leukemia and Lymphoma Society: Can reimburse you for insurance premiums, co-pays, deductibles, co-insurance and prescription medication if you have health insurance and have a blood cancer diagnosis.

  • PAN Foundation: Offers to help underinsured patients with their out-of-pocket medical costs.

  • RIP Medical Debt: This organization buys medical debt in bundles for pennies on the dollar and forgives them. However, you can't apply directly to receive forgiveness through the program.

  • United Healthcare Children's Foundation: Offers grants to help cover medical expenses for children.

Other ways to obtain medical debt relief

If you're having a hard time keeping up with your medical bills and don't qualify for any programs that provide assistance, here are some steps you can consider:

  • Get on a payment plan: Many health care providers offer installment plans, allowing you to break up your payments over time. If you're already on one and still struggling, try to negotiate a lower monthly payment.[5]

  • Make sure the insurance company has paid its share: Sometimes, billing issues can result in your insurer not covering the full amount that they should, says Tayne. Look over your billing statements and your health insurance plan to make sure you're not paying more than your fair share.

  • Ask to settle the debt: In some cases, health care providers and debt collectors may be willing to accept a settlement of less than what you owe on your account.[5] "A debt collector is unlikely to forgive your entire balance," says Tayne. "The company is not a charity; it exists to make money. However, you may be able to settle your debt for less than half of what you owe if you're a skilled negotiator or work with one." However, note that you may need to pay the settlement amount in a lump sum if approved.[6]

  • Hardship programs: Check with your medical provider to see if it offers hardship programs that can help reduce your burden or provide forbearance while you get back on your feet financially.[5]

  • Consider filing for bankruptcy: Bankruptcy is rarely ideal, but it might give you the relief that you need. If you don't have any other options, consult with a credit counselor or bankruptcy attorney to see if filing for bankruptcy is the right move for you.

How medical debt is treated by the credit bureaus

In the past, credit bureaus allowed debt collectors to report unpaid medical collection debt six months after starting the collection process.

On July 1, 2022, though, all three national credit bureaus increased that time period to one year. Additionally, the bureaus removed all paid medical collection accounts from credit reports and will remove all unpaid medical collection accounts under $500 in the first half of 2023.[7]

According to Equifax, these steps will remove 70% of all medical collection debt from consumer credit reports.[7]

"The credit bureau reporting delay is a huge win for consumers because it means fewer blows to their credit scores," says Tayne. "They'll have more time to pay off their debt before it negatively impacts their credit standing."

If you still have unpaid medical bills on your reports and they don't qualify for removal, they can remain on your reports for up to seven years and significantly damage your credit score.[8] If you pay them off, they'll be removed, and your credit score will likely improve.

Article Sources
  1. Noam N. Levey, "100 Million People in America Are Saddled With Health Care Debt," Kaiser Family Foundation, June 16, 2022, https://khn.org/news/article/diagnosis-debt-investigation-100-million-americans-hidden-medical-debt/.
  2. "CFPB Estimates $88 Billion in Medical Bills on Credit Reports," CFPB, March 1, 2022, https://www.consumerfinance.gov/about-us/newsroom/cfpb-estimates-88-billion-in-medical-bills-on-credit-reports/.
  3. "FACT SHEET: Supporting Veterans Experiencing Financial Hardship and Addressing the Harmful Effects of Military Environmental Exposures," The White House, March 1, 2022, https://www.whitehouse.gov/briefing-room/statements-releases/2022/03/01/fact-sheet-supporting-veterans-experiencing-financial-hardship-and-addressing-the-harmful-effects-of-military-environmental-exposures/.
  4. "Help with Bills," USA.gov, https://www.usa.gov/help-with-bills#item-36707.
  5. Roxanne Nelson, "How to Find and Use Financial Assistance Programs," GoodRx, Sept. 13, 2021, https://www.goodrx.com/insurance/health-insurance/medical-financial-assistance-programs.
  6. "How Much Will Medical Debt Collectors Settle For?" National Service Bureau, Nov. 30, 2020, https://www.nsbi.net/medical-blog/how-much-will-medical-debt-collectors-settle-for.
  7. "Equifax, Experian, and TransUnion Support U.S. Consumers With Changes to Medical Collection Debt Reporting," Experian, March 18, 2022, https://www.experianplc.com/media/latest-news/2022/equifax-experian-and-transunion-support-us-consumers-with-changes-to-medical-collection-debt-reporting/.
  8. Karen Axelton, "How Does Medical Debt Affect Your Credit Score?" Experian, Nov. 20, 2020, https://www.experian.com/blogs/ask-experian/medical-debt-and-your-credit-score/.

About the Authors

Ben Luthi

Ben Luthi

Ben has been writing about money since 2013. He's been on staff at NerdWallet as a credit card writer and for Student Loan Hero, where he covered student loans and other personal finance topics. Ben's work has appeared in U.S. News, The New York Times, Experian, FICO, Credit Karma, Bankrate and more

Full bio

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