Can't Pay Your Health Insurance Deductible? What Now?

6 Ways You Can Pay

Health insurance deductibles have been steadily rising for years. The vast majority of employer-sponsored health plans require members to pay a deductible. Among these workers' plans, the average individual deductible was $1,655 in 2019. This is dramatically higher than the average annual deductible a decade earlier, which was just $533. 

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Among people who buy their own health insurance in the individual market, deductibles are even higher. eHealthinsurance, an online brokerage, reported that for 2020 coverage selected by consumers who used eHealthinsurance and didn't qualify for any ACA subsidies, the average individual deductible was $4,364.

It's important to note that people who don't receive premium subsidies are more likely to buy lower-cost bronze plans, which have higher deductibles. And the ACA's cost-sharing subsidies—which apply to 50% of exchange enrollees in 2017—provide significantly lower deductibles for people who are eligible based on their income. But there is no doubt that people who buy their own health insurance are generally subject to fairly significant deductibles.

[Note that cost-sharing subsidies are only available on silver plans; a single person with an income of nearly $32,000 will qualify for cost-sharing subsidies in 2021, but would need to select a silver plan through the health insurance exchange in their state in order to take advantage of this benefit.]

You’re not alone if you can’t afford your health insurance deductible. No matter how much your deductible is, if you don’t have that much in savings and you’re living paycheck to paycheck, it can feel like your deductible is too high.

If you can’t afford your deductible, your options for dealing with it depend on whether you owe your deductible right now, or whether you’re preparing in advance. If you’re looking to the future and realizing you’ll have to come up with this chunk of change eventually, check out “Deductible Too High? How To Budget for a Health Insurance Deductible.” And if you enroll in an HSA-qualified health plan, try to make it a priority to establish an HSA and contribute to it on a regular basis, so that the money will be there if you end up needing to meet your deductible.

If you have to pay your deductible right now but you don’t have the money, your predicament is tougher. If you don’t come up with a way to pay, your care may be delayed or you might not be able to get the care you need. Here are some possible options.

Negotiate a Payment Plan

While your doctor can’t waive or discount your deductible because that would violate the rules of your health plan, he or she may be willing to allow you to pay the deductible you owe over time. Be honest and explain your situation upfront to your doctor or hospital billing department. Explain that you’re not trying to get out of paying but that you’d like the privilege of setting up a payment plan.

Although it’s aimed at asking for discounts rather than setting up a payment plan, “How To Negotiate With Your Provider” gives tips on how to have a conversation like this with your doctor.

The Caveats:

  • You may owe your deductible to more than one health care provider. For example, if you see the doctor and he or she orders blood tests, you’d owe part of your deductible to your doctor and part of it to the blood test lab. This means negotiating two payment plans, not one.
  • If you don’t keep up the payments on your negotiated payment plan, you’ll seriously damage your relationship with your doctor, and you might not get another opportunity to set up a payment plan for future medical bills.

Explore Cheaper Health Care Options

There’s usually more than one way to treat a given health care problem. Are you using the least expensive treatment option that will work for you?

While switching to a less expensive treatment option won’t make your deductible any smaller, the deductible will come due over a longer period of time and in smaller chunks. For example, if you have a $3,000 deductible and are getting a treatment costing $700 per month, switching to a treatment costing $400 per month will lower your monthly expenses. You’ll still end up paying the entire $3,000 deductible before your health insurance begins to pay. But, with the cheaper treatment, you’ll spread that deductible over eight months rather than five months, making it easier to manage.

Can you get the care at a free clinic or a community health center that will care for you regardless of your ability to pay? Some of these places will care for you for free, will charge you based on your income, or will accept what your health insurance pays as payment in full. Check to see if there is a community health center near you.

Take an Early Distribution from Your Retirement

By choosing to take money from your retirement to pay your health insurance deductible, you’re borrowing from your future to pay for your present. This isn’t a very good long-term plan. But, if you’re facing a situation where you may not have a future if you can’t pay your health insurance deductible, then you might consider this an option.

If you take a distribution from your traditional IRA before you’re age 59 1/2, you’ll owe income taxes on that money as well as a penalty tax. But you may qualify for a hardship distribution from your IRA, depending on the circumstances.

Two other options may help you avoid the early distribution penalty:

  • You may withdraw the money you contributed to a Roth IRA without a penalty. This doesn’t apply to the earnings and investment gains in the Roth IRA, but only to the funds you actually contributed. Learn more here about Roth IRA withdrawals.
  • Some 401K plans will allow you to take a loan of up to $50,000 or half the amount in your 401K, whichever is smaller (note that these rules were temporarily relaxed by the CARES Act, which was enacted in March 2020 to address the COVID-19 pandemic; for six months, starting when the law was enacted, people can take a loan of up to $100,000 from their 401(k), and it can be up to the full account value if the account has less than $100,000 in it). Commonly, the loan is paid back over a period of five years with money automatically subtracted from your paycheck. You’ll pay interest on the loan, but you’re paying that interest to yourself—the interest goes into your 401(k). If you lose your job before the loan is paid back, you have to come up with the remaining balance or it’s considered an early distribution and you’ll pay both income taxes and a penalty on it. Learn more here about what you should know before borrowing from your 401(k).

Sell Your Stuff

Nobody wants to sell their stuff to pay for something as mundane as a health insurance deductible; but, desperate times call for desperate measures. If you can't get you your next round of chemotherapy because you can’t pay your health insurance deductible, then it’s time to think about how to raise the funds.

Start by considering selling off valuable but unnecessary things like your jewelry, bicycle, surfboard, iPod, or motor scooter. Move up to selling other valuables like your car or wedding ring only if you’re really desperate. You're likely to get a better price for things if you sell them yourself on a platform like Craigslist or eBay than if you take them to a pawn shop or consignment store, but selling them yourself takes more effort.

Charge It

Using a credit card, personal loan, or home equity line of credit to pay your health insurance deductible is a dicey proposition. It amounts to mortgaging your future and getting deeper into debt just to meet your basic expenses. If you can’t pay your deductible now, how will you pay next year’s deductible while you’re also paying off your debt from this year’s deductible?

On the other hand, if you need medical treatment to save your life, prevent permanent disability, or keep you healthy enough to keep your job, using credit is the lesser of the evils.

Credit doesn’t have to mean a credit card. It can also mean borrowing from the equity in your home, a friend or family member, or taking a personal loan from a bank or credit union.

Access a Workplace Financial Hardship Charity

Many large employers have an employee-assistance charity program. Funded by small donations made by individual employees, these donations are subtracted from donors’ pay in equal amounts over the year.

Employees facing a one-time financial hardship may apply to the charity for financial assistance. These charities don’t usually require you to be a donor in order to get help, but rules about how much financial assistance will be provided, who qualifies, and how the money is disbursed vary from program to program. Your human resources or employee benefits department is likely your best source of information. 

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Article Sources
Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. The Henry J. Kaiser Family Foundation. 2019 Employer Health Benefits Survey. September 25, 2019.

  2. eHealthinsurance. ACA Index Report on Unsubsidized Consumers for 2020 Coverage. June 2020

  3. US Department of Health and Human Services. Centers for Medicare and Medicaid Services. Early 2020 Effectuated Enrollment Snapshot. July 23, 2020.

  4. Internal Revenue Service. Retirement Topics: Hardship Distributions.

  5. Congress.gov. H.R.748 - CARES Act. Enacted March 27, 2020.