What Happens to Unpaid Medical Bills?

Introduction: Ignoring Medical Bills Can Be Costly

Medical expenses can be overwhelming, especially when they come unexpectedly. While many people prioritize essentials like rent and groceries, unpaid medical bills can quietly create serious long-term financial issues. If left unresolved, they can damage your credit, lead to collections, or even result in legal consequences.

So, what happens to unpaid medical bills? Let’s break it down step by step.

1. Initial Billing and Reminders

Once you receive medical treatment, the provider or hospital will issue a bill after processing it with your insurance (if applicable). If there’s any remaining balance — like a deductible, co-pay, or uncovered service — you’ll receive a bill.

• You may get one or two reminder notices

• Providers usually allow 30–90 days before taking further action

2. Debt Sent to Collections

If your bill remains unpaid after the grace period:

• The hospital or clinic may sell or transfer your debt to a collections agency

• You’ll start receiving calls and letters from a third-party collector

• This is often done 90 to 180 days after the initial billing date

Note: As of July 2022, in the U.S., unpaid medical bills do not show up on your credit report for the first 12 months, giving you more time to resolve them.

3. Impact on Your Credit Score

If the debt is still unpaid after the 12-month grace period:

• The collection account may appear on your credit report

• Your credit score can drop by 50–100 points or more, depending on your profile

• This affects your ability to get loans, credit cards, or even rent housing

However, as per recent changes by credit bureaus (Equifax, TransUnion, Experian):

• Medical debt under $500 no longer affects your credit score

4. Potential Legal Action

If the debt is large and still unpaid, the collections agency or provider might:

• File a lawsuit to recover the amount

• Request a court judgment to garnish your wages or bank account

While this is less common for small bills, it can happen if you ignore large balances.

5. Accruing Interest or Late Fees

Some medical providers add interest or late fees on unpaid bills, especially if mentioned in your original patient agreement. This can increase the total amount owed over time.

6. Loss of Access to Medical Services

In some cases:

• Providers may refuse to schedule new appointments until outstanding balances are paid

• You might be denied non-emergency services

What You Can Do About Unpaid Medical Bills

• Contact the provider: Ask about payment plans or financial assistance

• Negotiate: Some bills can be reduced through negotiation or medical billing advocates

• Set up a payment plan: Most hospitals offer interest-free plans

• Check for errors: Billing mistakes are common — always request an itemized bill

• Use charity care programs or insurance appeals if eligible

Final Thoughts

Unpaid medical bills don’t just go away — they follow a path that can impact your credit score, financial stability, and access to care. The good news is that most providers are willing to work with patients who communicate and show intent to pay. If you’re struggling, it’s always better to talk to the provider early than to wait until your account is in collections.