Living with a disability often means more medical appointments, prescriptions, and treatments—but it also usually means living on a fixed income that doesn't stretch very far. When medical bills start piling up, it can feel like you're trapped between taking care of your health and keeping your finances afloat. The good news is that there are real strategies and programs that can help you manage healthcare costs without drowning in debt.
In this article, we'll cover:
- Understanding your health coverage options on SSI and SSDI
- How to negotiate medical bills and set up payment plans
- Hospital financial assistance programs you might not know about
- Prescription drug savings programs and resources
- Protecting yourself from medical debt collectors
- When medical bills might affect your disability benefits
Understanding Your Health Coverage
Your first line of defense against medical debt is knowing what insurance coverage you have—and using it effectively.
If you receive SSI, you likely qualify for Medicaid in most states. Medicaid covers a wide range of medical services with little to no out-of-pocket cost. However, coverage varies by state, and you may still face some copays or have trouble finding providers who accept Medicaid. Make sure you understand what your state's Medicaid program covers and always verify that a provider accepts Medicaid before receiving services.
If you receive SSDI, you become eligible for Medicare after a 24-month waiting period from when your disability benefits began. Medicare has more cost-sharing than Medicaid—including premiums, deductibles, and coinsurance—which is where medical bills can start to accumulate. Consider supplemental coverage like a Medigap policy or Medicare Advantage plan to reduce your out-of-pocket costs, and look into the Extra Help program for prescription drug costs.
If you receive both SSI and SSDI, you may have both Medicaid and Medicare (called "dual eligibility"). This can actually work in your favor, as Medicaid often picks up costs that Medicare doesn't cover.
Negotiating Your Medical Bills
Many people don't realize that medical bills are often negotiable. Healthcare pricing is notoriously inconsistent, and providers frequently accept less than the initial billed amount.
Ask for an itemized bill. Before paying anything, request a detailed breakdown of every charge. Billing errors are common—studies suggest they appear on a significant percentage of medical bills. Look for duplicate charges, services you didn't receive, or costs that seem unreasonably high.
Request the cash-pay or self-pay rate. Hospitals and providers often have lower rates for patients paying out of pocket. Even if you have insurance, if you're facing a large bill after insurance, ask if they can apply a lower rate.
Negotiate the total amount. Call the billing department and explain your financial situation. Many providers will reduce bills by 20-50% for patients who demonstrate financial hardship, especially if you can pay a lump sum. Be polite but persistent, and don't be afraid to ask for a supervisor if the first person you speak with can't help.
Ask about prompt-pay discounts. Some providers offer a discount if you pay the bill in full within a certain timeframe. Even a 10-15% discount can make a meaningful difference.
Setting Up Payment Plans
If you can't pay a bill in full—even after negotiating—most providers will work with you on a payment plan. The key is to set up a plan you can actually afford.
Contact the billing department before the bill goes to collections. Providers are much more willing to work with you if you reach out proactively. Once a bill goes to collections, your options become more limited.
Propose a payment amount that fits your budget. You know what you can afford better than they do. If they suggest $200 a month and you can only manage $50, say so. Most providers would rather receive $50 a month than send the bill to collections.
Get the agreement in writing. Before making your first payment, ask for written confirmation of the payment plan terms, including the total amount owed, monthly payment, and confirmation that no interest will be charged.
Many providers offer interest-free payment plans. Unlike credit cards, medical payment plans often don't charge interest as long as you make your payments on time. This makes them a much better option than putting medical bills on a credit card.
Hospital Financial Assistance Programs
Nonprofit hospitals are required by law to offer financial assistance programs (sometimes called "charity care"), and even for-profit hospitals often have similar programs. These programs can reduce your bill significantly or even eliminate it entirely.
You don't have to be destitute to qualify. Many hospital financial assistance programs cover patients with incomes up to 200%, 300%, or even 400% of the federal poverty level. In 2025, that means a single person earning up to $60,000 or more might qualify for some level of assistance, depending on the hospital's policy.
Ask for the financial assistance application. Hospitals are required to make these applications available, but they don't always advertise them prominently. Ask the billing department directly for a financial assistance or charity care application.
Provide documentation of your income. You'll typically need to show proof of income, which for disability recipients usually means your Social Security benefit letter. Some programs also consider your expenses and overall financial situation.
Apply even if you're not sure you qualify. The worst they can say is no. Many people who assume they won't qualify are surprised to find they're eligible for significant help.
Prescription Drug Savings
Medications can be one of the biggest ongoing healthcare expenses, but several programs can help reduce these costs.
Extra Help (Low-Income Subsidy) is a federal program that helps Medicare recipients pay for Part D prescription drug costs. If you qualify, you could save an average of $5,300 per year on medications. SSI recipients automatically qualify for full Extra Help.
Pharmaceutical company patient assistance programs provide free or low-cost medications directly from drug manufacturers. Most major drug companies offer these programs, and eligibility requirements vary. Websites like NeedyMeds.org and RxAssist.org can help you find programs for your specific medications.
State Pharmaceutical Assistance Programs (SPAPs) exist in many states and provide additional help beyond what federal programs offer. Check with your state's Medicaid office or department of aging to see what's available.
Prescription discount cards and apps like GoodRx, RxSaver, and others can sometimes offer lower prices than insurance, especially for generic medications. It's worth comparing prices before filling any prescription.
Ask about generic alternatives. Generic medications contain the same active ingredients as brand-name drugs but cost a fraction of the price. Ask your doctor if there's a generic option for any brand-name medications you're taking.
Protecting Yourself from Debt Collectors
If a medical bill does go to collections, you have rights. Understanding them can help you protect yourself from harassment and potentially reduce what you owe.
Medical debt has special protections. Under rules that took effect in recent years, medical debt under $500 cannot appear on your credit report, and paid medical debt must be removed. Medical debt also can't appear on your credit report until it's been in collections for at least a year, giving you time to resolve it.
You can dispute inaccurate debt. If a collector contacts you about a debt you don't recognize or believe is incorrect, you have the right to request verification in writing. The collector must stop collection efforts until they provide proof that the debt is valid.
Collectors cannot take your disability benefits. SSI and SSDI payments are generally protected from garnishment by debt collectors. Your benefits cannot be seized directly from Social Security, and funds in your bank account that came from Social Security are protected up to two months' worth of benefits.
You may be able to settle for less. Collection agencies often buy debt for pennies on the dollar, which means they may accept a settlement for significantly less than the original amount. If you can offer a lump sum, even a small one, you may be able to negotiate a settlement.
When Medical Bills Might Affect Your Benefits
For most disability recipients, medical debt itself doesn't affect your benefit eligibility. However, there are a few situations to be aware of.
SSI resource limits still apply. If you receive a settlement or payment related to a medical issue (like a personal injury settlement), that money could count as a resource and affect your SSI eligibility. Spend down the funds on allowable expenses or consider a special needs trust if you receive a large sum.
Unpaid bills don't count as resources. Owing money doesn't help you, but it also doesn't hurt your benefit eligibility. A medical bill you owe is not counted as an asset.
Using an ABLE account for medical expenses. If you have an ABLE account, medical expenses are qualified disability expenses. You can use ABLE funds to pay medical bills without affecting your SSI eligibility, and the savings in your ABLE account (up to $100,000) don't count toward SSI's resource limit.
Creating a Long-Term Strategy
Managing medical costs on disability isn't just about handling today's bills—it's about setting up systems that protect you over time.
Keep all of your medical paperwork organized in one place, including insurance cards, explanation of benefits statements, and receipts. Track your medical spending each month so you can see patterns and plan ahead. Build a small emergency fund if possible (within SSI resource limits) to handle unexpected medical costs. Review your insurance coverage annually to make sure you have the best plan for your needs. Don't skip preventive care—catching problems early usually costs less than treating them later.
Living on disability benefits means every dollar matters—especially when medical bills arrive. Purple offers a checking account designed specifically for people on SSI and SSDI, helping you track your spending, manage your resources, and stay on top of your financial health.