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Don't let medical debt sideline your financial goals

What we'll cover

  • How to prepare financially for healthcare costs

  • Options to try to lower the cost of your medical bill

  • What medical loans can help finance

If you find yourself staring at a pile of unpaid medical bills, unsure of how to even begin paying them down, you’re in good company.  Medical debt is a pervasive problem, with one survey indicating that half of Americans carry some form of it. The issue is on the rise too. Over the past decade, unpaid medical bills became the largest source of debt owed to collections agencies in the United States.


Beyond acting as a source of stress, medical debt can prevent you from accomplishing your financial goals, like buying a home or paying off other types of debt. While you can’t always predict unexpected healthcare costs, you can take steps to help prevent the cost of a medical emergency (or even routine care) from becoming a financial burden.

Prevention is the best medicine

Planning ahead for medical costs is a smart way to ensure you’re not caught off guard when an unexpected bill arrives. You can set aside funds for future health expenses with an  Ally Bank Savings Account . You can customize savings goals with savings buckets , which act as digital “envelopes” that allow you to focus on saving toward particular medical expenses. You might have a dental bucket to save up for a root canal, for example, or a cosmetic procedure bucket to fund an elective surgery.


Even if you don’t have a particular medical savings goal in mind, an emergency fund is a prudent way to save for unforeseen healthcare costs. You can start small and use our  emergency fund calculator  to determine how much you may be able to save each month.

Look at the price tag

You probably comparison shop when you purchase electronics or furniture, but you might not think of it when it comes to healthcare. But you should — the baseline prices for the same service or procedure can vary widely. Hospitals must now list standard prices for medical procedures online, making it easier for patients to see how different providers stack up against each other in terms of cost.

Be ready to bargain

Before any medical procedure, you should confirm with your health insurance provider about co-pays and other potential fees you will be responsible for, so you’re not hit with a big bill you weren’t expecting.


When you get a quote, know that it’s not necessarily the “final offer.” While you can’t negotiate the cost of a surgery the same way you would haggle over the price of a house or a car, doctors and insurance companies may be willing to work out alternative payment solutions.


If you’re unable to pay the full cost of a medical procedure upfront, ask about a payment plan. You may be able to negotiate this ahead of time, but if you find yourself with a bill after you have already received care, you can inquire about your options then.

When you get a quote, know that it’s not necessarily the ‘final offer’.

Bring in a pro

Navigating health insurance and medical expenses can be overwhelming and confusing. Hiring a medical bill advocate to negotiate on your behalf can reduce the stress of dealing with a difficult situation. These professionals are trained to understand the complexities and nuances involved in medical billing and can spot crucial errors like overbilling, as well as help formulate strategies to reduce the amount you owe.

Consider a medical loan

If you find yourself with unmanageable medical debt, you’re not alone. But an inability to pay shouldn’t stop you from receiving the care you need.

Check with your provider to see if they offer medical loans. In some cases when upfront payment is not feasible, a medical loan can help you get the care you need with a more reasonable interest rate than a credit card, for example. 

Don't turn a blind eye

Whatever you do, don’t stick your head in the sand if you find yourself with an outsized medical bill you can’t afford. Failure to pay could put you in collections and eventually harm your credit score. Explore all your options, including talking to your provider about ways you might be able to reduce your bill.

Minimize and manage

Medical debt is an unfortunate and common problem, but it doesn’t have to derail your financial plans. Be proactive about saving for medical expenses, and if you find yourself with debt, know you have options that could help reduce it.

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