108,000 Americans will receive medical debt relief after $1.34M donation from Stacey Abrams' PAC

A voting rights group led by progressive Democrat Stacey Abrams has set its sights on a new objective: helping patients get out of medical debt.

"I know firsthand how medical costs and a broken healthcare system put families further and further in debt."

- Stacey Abrams

According to an Oct. 27 press release, The Fair Fight Political Action Committee gifted a $1.34 million donation to the nonprofit RIP Medical Debt as part of an effort to help more than 108,000 Americans with unpaid hospital bills. The donation will impact debtors in five southern states: Alabama, Arizona, Georgia, Louisiana and Mississippi.

"For people of color, the working poor and middle-class families facing crushing costs,  we hope to relieve the strain on desperate Americans and on hospitals struggling to remain open," Abrams said in a statement.

While this action will provide much-needed medical debt relief for struggling households, it covers just a fraction of those with unpaid hospital bills. Medical costs are the leading cause of bankruptcy in this country, and nearly 1 in 5 Americans has unpaid medical bills.

Keep reading to learn more about financial assistance for medical expenses. If you're struggling to keep up with hospital bills in collections, visit Credible to explore your borrowing options such as personal loans and credit cards.

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3 free ways to reduce your medical bills

The fear of being in debt shouldn't stop you from seeking help in a medical emergency or necessary treatment for chronic illnesses and disabilities. Here are a few ways you may be able to reduce the amount you owe:

1. Know your legal rights. Nonprofit hospitals are required by the federal government to offer financial assistance programs to low-income and uninsured patients, according to the National Consumer Law Center (NCLC). You may qualify for discounted services, free care or a zero-interest payment plan if you meet the eligibility requirements.
2. Negotiate your medical bills. You may qualify for a discount on your bill if you offer to pay upfront. You should also ask for an itemized bill from the doctor's office as well as an Explanation of Benefits (EOB) from the health insurer to check for errors like double-billing or a lack of coverage.
3. Seek help from a nonprofit organization. Medical billing advocates and credit counselors may help you qualify for full or partial debt forgiveness. Ask your health care provider if they have advocates on staff to help with financial assistance.

Not all patients will qualify for reduced-cost or discounted medical care, though. If you've exhausted all your options above and still need medical debt relief, it might be necessary to find another way to manage your expenses.

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Don't qualify for debt relief? Consider your borrowing options

Unpaid hospital bills can tarnish your credit report and end up in medical collections. Before your debt is sent to a collections agency, think about paying off your medical bills using one of these methods:

1. Credit cards
2. Personal loans
3. Cash-out mortgage refinancing

Learn more about each borrowing option in the sections below.

Credit cards

Typically, credit cards can be an expensive borrowing option due to high interest rates. However, you may be able to pay off your medical debt without paying interest by utilizing a credit card with a 0% APR introductory offer. These can last up to 18 months, which can allow you to pay off your hospital bills before interest accrues.

You can also consider researching medical credit cards, which may offer reduced-interest or zero-interest payment plans. Keep in mind that credit card approval hinges on your creditworthiness, so it may be difficult to qualify for a good offer if you have bad credit.

Compare 0% APR credit card offers in the table below and on Credible's online financial marketplace without impacting your credit score.

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Personal loans

If you don't qualify for a payment plan through the health care provider, consider using a personal loan to break your medical bill into fixed monthly payments. Personal loans are lump-sum loans that you repay over a set period of time, typically a few months or years.

Lenders use your credit score to determine your interest rate and loan eligibility, so shop around with multiple personal loan lenders to lock in the best terms for your financial situation. You can compare personal loan rates on Credible for free and use a personal loan calculator to estimate your monthly payments. 

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Cash-out mortgage refinancing

With home equity at record highs, homeowners may consider cash-out mortgage refinancing to pay off their debts — including medical bills. Since mortgage rates are still relatively low, it may be possible to take out a larger mortgage loan without changing your monthly payment. 

While cash-out mortgage refinancing may grant you access to a lump sum of money to pay medical bills, it does come with its drawbacks. You'll end up paying closing costs, which are typically about 2-5% of the loan amount.

Browse current mortgage interest rates in the table below, and visit Credible to begin the cash-out refinancing process.

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