Medical Bill Payment Plans: How to Ask for One and What to Watch For

You can ask a hospital or doctor's office for a payment plan, which lets you pay a bill in monthly installments. Before you agree, check that the bill is correct, ask about financial assistance, and find out whether the plan charges interest or fees. The Consumer Financial Protection Bureau (CFPB) warns that medical credit cards and some financing plans offered in a provider's office can carry high interest, especially after a "deferred interest" promotion ends.

Should I check the bill before setting up a payment plan?

Yes. A payment plan locks you into paying the amount on the bill. Before you sign up:

• Match the bill to your Medicare Summary Notice or your plan's Explanation of Benefits (EOB). The amount you owe shouldn't be more than the "maximum you may be billed" for Medicare-covered services.
• Make sure every insurer was billed, including Medigap or a retiree plan.
• Ask for an itemized bill and check for duplicates.

It's much easier to fix a bill before you start paying on it.

Should I ask about financial assistance first?

Yes. The CFPB suggests asking about financial assistance and whether your insurance covers the care before using a medical credit card or financing plan. Nonprofit hospitals must have a written financial assistance policy under Internal Revenue Service (IRS) rules. You might qualify for free or reduced-cost care, which could shrink the bill before any payment plan starts.

Also check whether you qualify for a Medicare Savings Program. People in the Qualified Medicare Beneficiary (QMB) program can't be billed for Medicare deductibles, coinsurance, or copays for covered services.

What kinds of payment options will I be offered?

The CFPB describes several types:

• A payment plan directly with the provider. Some are interest-free.
• A payment plan or line of credit through another lender, arranged by the provider.
• A medical credit card, which can be used for medical bills.

These can look similar when the billing office offers them. Ask who you'd actually be paying, the provider or a finance company.

What is deferred interest, and why does it matter?

The CFPB explains that many medical credit cards and some financing plans offer zero or low interest for a promotional period. If you don't pay the full balance by the end of that period, or you miss a payment, interest can be charged on the full amount you originally charged, including the part you already paid off. The CFPB says rates after a promotion can be upwards of 25 percent in some cases.

For example, if you charge a bill and pay most of it off during a 12-month promotion but a small balance is left, you could owe interest going back to the first day on the whole original amount.

What should I ask before agreeing to a payment plan?

• "Is this plan with your office, or with a finance company?"
• "Is there any interest? When does it start?"
• "Is the interest deferred? What happens if I don't pay it all off in time?"
• "Are there any sign-up fees or late fees?"
• "What's the lowest monthly payment you'll accept?"
• "Will you hold off on collections as long as I make my payments?"
• "Can I get the terms in writing?"

The CFPB suggests noting when interest starts, whether the rate is fixed or variable, and whether interest compounds.

How do I ask for a payment plan?

Call the billing office. You might say:

"I want to pay this bill, but I can't pay it all at once. Before I set up a plan, can you confirm that Medicare and [secondary insurance] have paid and send me an itemized bill? I'd also like a financial assistance application. If I still owe a balance, can we set up an interest-free monthly plan of $[amount]?"

Pick a monthly amount you can afford every month, including in months with other bills.

What if I can't keep up with the plan?

Call the billing office before you miss a payment. Ask if they can lower the monthly amount or pause payments. If the bill came from a nonprofit hospital, ask again about financial assistance. IRS rules give people a window after the first bill to apply, and hospitals must make reasonable efforts to check eligibility before taking certain collection actions.

Frequently asked questions

Do hospitals have to offer payment plans?

Rules vary by state and by provider. Ask the billing office whether it offers one.

Are medical payment plans interest-free?

Some are. Others charge interest, and medical credit cards often have deferred interest. Ask before you agree.

Is a medical credit card a good idea?

The CFPB warns that medical credit cards can be costly, especially after a deferred-interest promotion ends. Ask about financial assistance and interest-free plans first.

Can I still apply for financial assistance after starting a payment plan?

Often, yes. Ask the hospital about its financial assistance policy and application deadline.

Want to make sure the bill is right before you start paying?

Bill Review Coach is a monthly medical bill review service for seniors and their families. Snap a photo of the bill and your Medicare notice, and we'll check it before you commit to a payment plan, and give you the words to ask for one. You make the calls and write the emails; we help you know what to say.