How To Pay For Weight Loss Surgery with Bad Credit

How can you finance bariatric surgery with a low credit score? Lenders deny patients less likely to pay back their money.

Keep the amount borrowed as small as possible.

Affordable payments lower the chance you fall behind, helping lenders approve your request.

Critical Points

  • Getting insurance to cover the procedure minimizes borrowing
  • Prior approval provides written confirmation of future coverage
  • Pre-certifying FSA benefits confirms more than $6,000 in financing
  • Loans from private lenders might fill any remaining gaps

Guaranteed Financing For Weight Loss Surgery

No private lender can offer guaranteed financing for weight loss surgery. It is an unrealistic expectation. However, there are better ways to get benefits approved in writing.  

Two third parties (insurance companies and the IRS) publish easy-to-follow rules. Learn how to confidently make your procedure more affordable, even when bad credit hampers borrowing power.

Medical Insurance

Using health insurance is the ideal way to finance weight loss surgery – even if you don’t have bad credit. Having this third party cover most costs is always superior to borrowing money.

Nearly-free weight loss surgery is possible through insurance by getting written payment confirmation in advance from an in-network provider, even without a current plan.

Annual Enrollment

The Affordable Care Act guarantees you can purchase health insurance covering pre-existing conditions immediately. Therefore, you can schedule your weight loss surgery shortly after the new coverage begins.

Sign up for coverage at Healthcare.gov during the annual open enrollment (November 1 through December 15). The government may even help you pay most of the premiums. People with bad credit frequently meet the low-income requirements for assistance.

Collaborate with your in-network surgeon to obtain prior authorization before scheduling the elective procedure.

Pre-Certification

Pre-certification or prior authorization means the insurance plan approves benefits for weight loss surgery in advance. You must prove that the procedure fits the company’s definition of medically necessary.

  • Diagnose or treat a sickness, injury, or symptom
    • Body Mass Index (BMI) above 40
    • BMI above 35 with obesity-related health problems
      • Diabetes mellitus, Type II
      • Cardiovascular disease
      • Hypertension
      • Obstructive sleep apnea
      • Life-threatening cardio-pulmonary problems
  • Prior participation in a clinical weight loss program
  • Suitable for the health problem
  • Within usual standards of care by doctors
  • Not more costly than another service
  • Part of another covered treatment

In-Network

Written confirmation from your insurance company that they will cover your weight loss surgery can mean different things based on the surgeon’s contractual relationship with your plan.

  • In-network providers agreed to accept the allowed amount as full payment. The allowed amount is a negotiated discount (often 50% or more of the retail price).
  • Out-of-network providers accept the allowed amount as partial payment and frequently bill patients for the remaining charges. This practice is called balance billing.

You might need to finance 50% of bariatric surgery if you choose an out-of-network provider. Approval will be challenging if you have bad credit. Therefore, verify in-network participation in advance.

Flexible Spending

A Flexible Spending Account (FSA) is another good way to finance weight loss surgery with written confirmation received in advance. You can benefit without a credit check, provided the procedure is not cosmetic. However, annual contribution limits restrict usage.

No Credit Check

Use your FSA to finance weight loss surgery without a credit check and pay no interest. Better yet, you save money on taxes in the process.

Choose to participate in your FSA during the annual open enrollment. Schedule your procedure during the first month of the new plan year (usually January).

  1. Your employer must immediately reimburse qualifying expenses up to the contribution limit.
  2. Employers cannot pull a copy of your consumer report or consider your credit score.
  3. You have up to twelve months to repay the loan using pre-tax payroll deductions, which reduce your income subject to federal, state, and FICA taxes.

Treat Obesity

You can use your FSA to finance bariatric surgery if the motivation is not cosmetic. The written assurance you need varies.

  • Insurance approves pre-certification: Submit an explanation of benefits afterward. Most FSA administrators will accept this paperwork. Confidently finance deductibles, copayments, coinsurance, and out-of-network charges when the procedure is medically necessary.
  • Insurance declines pre-certification: Get a pre-authorization from your FSA administrator instead. IRS rules for tax-deductible medical expenses are more lenient.
    • Allowed: amounts you pay to lose weight if it is a treatment for a specific disease diagnosed by a physician.
    • Not Allowed: weight loss aims to improve appearance, general health, or sense of well-being.

Therefore, you can be confident that the FSA administrator will approve your claim if a physician prescribes the procedure to treat medical conditions such as morbid obesity, high blood pressure, diabetes, sleep apnea, asthma, acid reflux disease, etc.

Annual Limits

Using your FSA to finance weight loss surgery financing has limits. While you can borrow up to $6,100 with written assurance of approval, it may fall short of your needs.

FSA contribution limits are currently $3,050 per employee, totaling $6,100 if both spouses can access the benefit at work.

  • Insurance approves pre-certification: $ 6,100 should cover deductibles, copayments, coinsurance, and out-of-network charges.
  • Insurance declines pre-certification: $6,100 is probably inadequate to cover all out-of-pocket costs when the procedure is not medically necessary. Consider the average price of each option.
    • Gastric Bypass – $24,000
    • Gastric Balloon – $8,150
    • Gastric Sleeve – $19,000
    • Lap Band – $15,140

Bariatric Surgery Financing With Bad Credit

The best way to finance bariatric surgery (without an FSA) is to keep the borrowed amount small. Private lenders are more likely to approve patients with bad credit when they can afford the projected monthly payment.

In other words, getting your medical insurance to cover the procedure is crucial. This way, you only have to finance the deductible, coinsurance, and copayments – if you pick an in-network provider.

Gastric Balloon

Unsecured financing works well to pay for gastric balloon procedures. Unsecured means you do not pledge collateral. Lenders must file a lawsuit to garnish wages and offset losses should you default.

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The monthly payments will be most affordable because you borrow less.

  1. Gastric Balloon is the least expensive non-surgical treatment for weight loss. The average retail price is about $8,000.
  2. “Not more costly than another service” is part of the medically necessary definition, meaning your health insurance is more likely to cover most costs.

Input the amount you want. Borrow what you need to cover the insurance deductible, copayments, and coinsurance. Select “Medical” as the reason you need the unsecured personal loan.

Be prepared to complete the online form by having this information handy.

  • Date of birth
  • Driver license number
  • Social Security number
  • Bank account and routing number

LAP-Band

Financing laparoscopic adjustable gastric band surgery (LAP-Band) with bad credit could be obtainable even though the average price ($15,000) is much higher than the Balloon.

LAP-Band is the least costly surgical weight-loss treatment, meaning your health insurance is more likely to cover most costs for this longer-term obesity treatment.

Therefore, you might only have to borrow enough to cover the insurance deductible and copayments. Patients with coinsurance (percentage of the allowed charge) may experience more difficulties because of the higher out-of-pocket costs.

  • 20% of $8,000 is $1,600 for gastric Balloon
  • 20% of $15,000 is $3,000 for LAP-Band

Gastric Bypass

Secured financing may be necessary to pay for gastric bypass (Roux-en-Y) surgery with bad credit. Secured means you pledge collateral a lender can repossess and sell to offset losses should you default.

The monthly payments will be the least affordable because you borrow more. Gastric Bypass is the highest-priced bariatric surgery, averaging about $24,000.

  • Your health insurance is less likely to cover costs because gastric Bypass is not the least costly surgical treatment for obesity.
  • You may need to borrow the total cost rather than just the insurance deductible, copayment, and coinsurance amounts.
  • In-network providers do not adhere to the discounted allowed amount for non-covered services, meaning you pay the retail price.

Therefore, secured home equity loans may be the only option for gastric bypass patients with bad credit. Lenders are likelier to approve requests when two additional qualifying ratios are low.

  1. The loan-to-value (LTV) ratio remains below 80%. Lenders calculate the LTV by dividing the balance on the first and second mortgages by the property’s current market value.
  2. The debt-to-income (DTI) ratio is below 45%. Lenders calculate the DTI by dividing all monthly debt payments by your monthly income.