This is the No. 1 reason Americans file for bankruptcy—here's how to make sure you're in good shape

Caitlin Rhea Spaulding | Twenty20

Even with health insurance, more and more individuals are finding that they cannot afford their medical bills.

A recent study published as an editorial in the American Journal of Public Health found that 66.5 percent of all bankruptcies filed by Americans were tied to medical issues (due to high costs or time out of work). The data showed that an estimated 530,000 families turn to bankruptcy each year because of high medical bills.

(Other reasons behind bankruptcy included high mortgages or foreclosure, spending or living beyond one's means, student loans and divorce.)

"Despite gains in coverage and access to care from the Affordable Care Act, our findings suggest that it did not change the proportion of bankruptcies with medical causes," the authors wrote.

Even worse, 57 percent of American adults say they've been surprised by a medical bill they thought would be covered by insurance, according to a survey from the research group NORC at the University of Chicago. This leaves many scrambling to find a way to pay their bills — on top essential expenses like mortgage, food and utility costs.

Unfortunately, those who can't pay off debt fast enough eventually have their bills turned over to a collection agency, which is bad news for their credit score. If you're drowning in medical bills, the important thing here is to know that you have options. Here are some helpful tips to help you cope with high medical bills:

1. Verify that the bill is not covered by insurance

As soon as you get your bill, it's important that you call your insurance company immediately to verify that they don't cover the listed expenses. Medical providers will sometimes send the bill directly to you — and not your insurance company.

2. Look for outrageously priced items

If you see a box of tissues for $20 or an aspirin pill for $10 on your bill (yes, these things really happen), call your medical provider's billing department and ask to have the item lowered in price or completely removed from your bill. If they refuse to budge, you may have to haggle with your insurance company. These things may seem small, but they an add up quickly.

3. Negotiate, negotiate, negotiate

As soon as you realize you can't able to pay your bill on time (or in full), talk to your insurance company and try to negotiate lower prices or a payment plan that works for you. Remember, they would rather work with you to get paid than getting a collection agency involved. If they resort to the latter, be prepared to see a huge dent in your credit score. (On September 15, 2017, the three major credit reporting agencies — Experian, Equifax and TransUnion — set a 180-day waiting period before including any medical debt on a credit report. You have just a few short months, so take advantage of that time.)

4. Put it on a credit card

This may not seem optimal, but opening up a new credit card to pay for your medical bills may help you get out of debt much quicker. It's also much better than having an unpaid collection hit your credit report. Keep in mind that you'll need to have a great credit score to begin with. When considering your options, look for credit cards that offer benefits like a signup bonus (for which you could qualify by paying your medical bill on the card) and 0 percent or low-interest financing (depending on your needs and credit).

5. See if you qualify for Medicaid

Medicaid offers free or low-cost care across a spectrum of health expenses to those with limited income or resources. Eligibility varies by state based on income and family size. For the most part, it is often offered to low-income people, families and children, pregnant women, the elderly and those with disabilities. You can check to see if you're qualified on Healthcare.gov. And if you do, you can use Medicaid to pay for expenses that have already incurred — but only within a certain time frame, so apply as soon as possible.

6. Hire a billing advocate

If you've tried and tried and still haven't made any significant headway, consider hiring a billing advocate. For those that are inundated with medical bills — maybe after a long illness or surgery — a billing advocate can sort through your bills and negotiate on your behalf. Advocates typically charge $100 to $500 an hour, so choose someone with a rate that makes sense based on the amount of debt you need to pay off.

7. Keep in touch with your collection agency and credit reporting agency

Once you get passed on to a collection agency, expect to receive a ton of calls from an agent. Do not ignore them. Pick up the phone and negotiate a payment plan. Make sure they understand you want to pay the bill. Most importantly, be honest about what you can afford and how long you want the payment to last. Make it a point to talk to your credit reporting agency as well. Once a debt is paid off, verify that it has been removed from your credit report.

Jennifer Streaks is a financial and consumer news journalist who has written for The Huffington Post, Motley Fool and Black Enterprise and been featured on ABC, MSNBC, FOX Business and HuffPost Live, discussing money, business and consumer news. Find her on Twitter @jstreaks .

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