Medical bills cost so much money to so many people. They overwhelm individuals, families, and society at large. How can we cope with this major issue? Can hospital bills be written off?
What Does It Mean to Write Off Hospital Bills?
When discussing how to write off hospital bills, we may mean one of three things:
- Can an individual write off hospital bills on their taxes?
- Is it possible to erase medical debt from an individual’s debt load?
- Can hospitals write off unpaid bills?
Each of these is very different from the others. However, understanding all three aspects can give you a good overview of what it means to manage hospital debt.
Can You Write Off Hospital Bills on Your Taxes?
The short answer to this question is yes. You can write off some hospital bills on your taxes as personal deductions if you do itemized deductions on your taxes. That said, there are a lot of caveats. The IRS explains everything in their Topic No. 502 page. The gist to know is:
- Many medical and dental procedures qualify for write-off. However, not all do.
- “You may deduct only the amount of your total medical expenses that exceed 7.5% of your adjusted gross income.”
- The IRS’ Interactive Tax Assistant (find a link at the bottom of Topic No. 502 page) can help you figure out if you personally qualify to write off hospital bills.
How to Reduce or Discharge Personal Medical Debt
If you have unpaid hospital bills then you risk financial problems. These problems include reduced credit score, calls from collection agencies, and potentially even a lawsuit for payment. But you do have a lot of options available to you to reduce or even discharge your medical debt. According to Magnify Money, these options include:
- Clear up any questionable charges on your bill.
- Negotiate a lower payment settlement with the hospital.
- Ask the hospital for financial aid or reduced payments.
- Pay your bill with a 0% or low-interest credit card or loan. Therefore, you can make more manageable payments.
There’s also the option to file for bankruptcy as a way to write off hospital bills. However, not all bankruptcy clears medical bills. Furthermore, you may experience consequences in getting funding for future necessary medical care. Therefore, you need to work with a bankruptcy attorney to determine whether or not this is right for you.
What Does It Mean When Hospitals Write Off Unpaid Bills?
Ultimately, some people won’t pay their bills. The hospital is unable to collect that money. In fact, unpaid medical bills make up approximately 5-6% of hospital expenses. So, what do they do? There are many answers to this. Furthermore, the decisions vary by hospital. However, yes, some hospitals write off their unpaid bills. For example, some hospitals cancel bills for people who simply aren’t able to pay. They call that charity care. Then they write off the charity care on their taxes. If you find yourself in a financial position that you’re unable to pay your hospital bill, then you might want to ask if they offer charity care or other forms of financial assistance.
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