Advisors Help Clients Cut Medical Debt, Build HSA Safety Net

Financial advisors and wealth managers say they can reduce clients’ medical debt and help them prepare for future health costs by verifying bills, negotiating charges, arranging affordable payment plans and promoting health savings accounts. In 2024, about 14 million U.S. adults — roughly 6% — owed more than $1,000 in medical debt, and at least $220 billion is owed nationwide, according to the Kaiser Family Foundation.

Advisors describe a health-care billing environment that can push patients into debt: complex itemized bills, unclear insurance coverage and surprise out-of-network charges. They recommend reviewing bills line by line and calling providers to confirm charges before accepting balances as final. Brayden Oswald, director and wealth manager at Burney Wealth Management in Nashville, reported that careful review often identifies errors and overcharges and that hospitals frequently agree to lower prices. “Ninety percent of the time when our clients ask for a reduction in price, it is granted to them,” he said.

Medical debt differs from mortgage or credit-card debt because it typically has no collateral and is treated differently by credit reporting agencies and collectors. James M. Dahle, an emergency physician and founder of The White Coat Investor, noted that providers will sometimes accept steep discounts to close an account and that medical debts can be settled for a fraction of the billed amount.

State rules determine whether interest applies to medical debt; rates can be as low as zero percent in some places. Advisors often arrange payment plans that fit clients’ monthly budgets so clients can continue saving and investing while repaying balances. Oswald reported his firm prefers manageable monthly payments rather than demanding lump sums.

Advisors also work to prevent avoidable debt by planning care pathways. John Samuels, founder and CEO of Wellworth, a health-care advisory firm in New York, described how a single symptom can generate multiple specialist visits and tests, increasing costs and time away from work. He recommended referring clients to in-network providers and estimating costs before care begins to reduce unexpected bills.

Health savings accounts are promoted as a long-term tool to cover medical costs. Advisors recommend clients enroll in HSAs when eligible, contribute regularly and invest the funds for growth. Oswald estimated that for younger clients, HSA investments could grow substantially over a working lifetime and serve as a tax-advantaged cushion for health expenses. Dahle said combining appropriate insurance coverage with HSA savings reduces the likelihood that medical bills will disrupt a financial plan.

In practice, advisors combine verification and negotiation of existing bills, structured payment plans, referrals to in-network providers and building HSA balances to address both immediate medical debt and future health expenses. They present these steps as part of routine financial planning for clients who face or seek to avoid medical-related financial strain.