This NC hospital canceled 11,500 liens it placed on patient homes to collect on medical debt — here’s what happened and how you can manage a health crisis without financial ruin

Liens: A common tool for recovering debt

The Atrium Health case reflects a broader national issue as medical debt continues to climb.

Americans owe at least $220 billion in medical debt, according to a February 2024 analysis of government data by the Kaiser Family Foundation. Approximately 14 million people (6% of adults) in the U.S. owe over $1,000 in medical debt, while about 3 million (1% of adults) owe more than $10,000 — debts that often force difficult choices between paying for health care or covering basic living expenses.

For hospitals, liens are often a last resort measure to collect unpaid bills. While most U.S. states allow hospital liens, critics argue that they are ethically problematic, particularly when applied to patients in financial hardship. An Urban Institute study found that nearly two-thirds of adults with past-due medical debt had incomes well below the median income in their area.

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Tips for managing medical costs without risking financial stability

Navigating a health crisis without accumulating debt is difficult, and just one major health event can drastically change the financial picture, even for those who are financially stable. However, there are practical steps everyone can take to manage expenses and avoid financial ruin.

Know your options

If you’re uninsured or underinsured, consider coverage options through the Affordable Care Act (ACA) marketplace, Medicaid or employer-provided insurance during open enrollment. Understanding what your plan covers can reduce out-of-pocket expenses, and many plans offer preventive care that helps prevent larger bills.

Some insurers also offer programs to assist with chronic conditions or high-cost treatments. Checking for available support from your insurer can save significantly on health expenses.

Negotiate bills and seek financial help

Hospitals often provide financial assistance, especially for low-income or uninsured patients, so don’t hesitate to contact the billing department to discuss options. Bills can frequently be reduced, especially if you can pay a portion upfront. If insurance doesn’t cover everything, ask if the hospital has discounts for cash payments or charity care policies.

Nonprofit organizations like the Patient Advocate Foundation and the HealthWell Foundation also offer financial assistance for those facing high medical costs, providing grants or loans that help cover expenses.

Consider a Health Savings Account (HSA)

If you have a high-deductible health plan, a health savings account (HSA) can help you save tax-free money for medical expenses. Contributions to an HSA are tax-deductible, reducing your taxable income and the funds can be used for qualified medical expenses, including copayments, prescriptions and deductibles.

Avoid using credit cards for medical bills

When dealing with large medical bills, it’s tempting to rely on credit cards, but high interest rates can lead to worsening debt. Instead, look into low-interest medical loans specifically designed for healthcare costs, as they often offer better terms and are more affordable in the long run.