The United States Congress is considering a change to the Fair Credit Reporting Act that would remove medical debt from credit reports, and help ease the financial impact of a major medical procedure.
Particularly for patients who suffered from a serious injury that ended up costing them thousands of dollars and perhaps prevented them from working for a period of time afterwards, medical debt can be difficult enough to overcome on its own. Add to that the hindrance that it causes on the ability to get other types of credit, such as a privatized student loan or a second mortgage, and the burden on consumers is high.
One woman told reporters that while working nights to pay for college, she developed chronic fatigue syndrome. Doctors ordered a sleep study that her insurance originally agreed to pay for, but reneged that promise after the treatment had already taken place. Suddenly faced with a $6,200 bill, the woman was unable to pay it right away. Although the debt has since been settled, the brief delinquency continues to affect her credit.
An estimated 40 percent of Americans have medical bills impacting their credit reports after debts with hospitals or clinics were turned over to debt collectors. Some debts are for thousands of dollars and others are as low as an accidentally unpaid $20 copay.
Medical bills are often harder for consumers to deal with because of the confusion of dealing with a healthcare provider, insurance company, and debt collector. The amount owned is often unclear and many patients spend months contesting a charge with an insurance company before either party chooses to pay it. Still, like credit card debt and mortgages, medical debt can cause serious financial harm if it goes unpaid.
Source: The Columbus Dispatch, “Incurable financial wounds plague many,” Mike Wagner and Jill Riepenhoff, Oct. 9, 2012
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