Cure Your Medical Debt Credit Score | Monica’s Medical Misegagas

The biggest credit bureaus will soon give some Americans a break from medical debt.

The no-surprises federal law can help many people avoid unexpected medical bills — and now those who still have medical debt on their credit reports may soon be getting a break. However, you must ensure that your debt qualifies.

The nation’s three largest credit bureaus, Equifax, Experian and TransUnion, have announced they will remove paid medical debt from credit reports starting July 1.

If you had an unpaid medical bill, but then paid it, chances are it’s still a black mark on your credit report and impacting your credit score.

Your credit score is what helps you qualify for mortgages and loans and it’s important to keep it healthy.

If you don’t have any other black marks on your credit report, removing medical debt can improve your score by up to a hundred points according to financial experts.

For those currently struggling with unpaid medical bills, you now have a year to negotiate with your insurance company and provider before that medical debt shows up on your credit report.

According to the Consumer Financial Protection Bureau, Americans are drowning in medical debt estimated at $88 billion.

In 2023, if your bill is less than $500, Equifax, Experian and TransUnion will no longer include medical debt in collections on credit reports.

It is important to understand that your health insurance may not cover everything.

Be sure to read the explanation of benefits provided by the company to find out what is covered and what is not covered.

If you have a large medical debt and don’t pay, collections and credit damage may be the least of your worries. You risk being sued and having your wages garnished. According to ProPublica, a quarter of the nation’s largest hospitals filed nearly 39,000 medical debt lawsuits between 2018 and 2020.

The pandemic could have an impact on an increase in these lawsuits.

How to avoid the nightmare?

Experts advise informing the supplier that you have received an invoice, but add that there may be potential errors.

According to Medical Billing Advocates, up to 80% of medical bills contain errors.

By taking this action, you can put a stop to when the supplier puts the invoice in default.

That doesn’t make the deal go away – you still have to pay the bill, but now you have time to negotiate your debt. Maybe the provider will let you start a payment plan or even a lower payment.

You can also file appeals with your insurance company and if errors are indeed found on the invoice, you could pay less.

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If you think you’ve been the victim of a “surprise medical bill,” you can also file a complaint with the Centers for Medicaid and Medicare Services.

Last month, the Consumer Financial Protection Bureau released a report highlighting complications in the US medical billing system.

Medical bills listed on credit reports can lead to reduced access to credit, increased risk of bankruptcy, avoidance of medical care, and difficulty finding employment, even when the bill itself is inaccurate or wrong.

The report outlines how these impacts are greatest for people from black and Hispanic communities, as well as low-income people, veterans, seniors and young adults of all races and ethnicities.

Bills may be sent to collectors by doctors, hospitals, parent companies or groups representing a service provider, so there may be multiple charges for the same visit.

Other key findings from the report:

• Medical debt affects tens of millions of households: approximately 20% of US households report having medical debt. The CFPB found that medical collections business lines appear on 43 million credit reports. In the second quarter of 2021, 58% of the bills that are in collections and on people’s credit files are medical bills.

• COVID-19 made the situation worse: uninsured and insured patients incurred substantial costs to cover COVID-19-related services, including testing and hospitalization. To the extent that people have deferred routine care during the pandemic, costs and medical debt are expected to rise post-pandemic.

• Medical debt affects households unevenly: Outstanding medical debt is more common among Blacks (28%) and Hispanics (22%) than among Whites (17%) and Asians (10%).

• Hold credit reporting companies accountable: Federal law requires credit reporting companies to implement reasonable procedures to ensure that medical debts on consumer reports are accurate. These procedures should include, if necessary, actions against suppliers who regularly report inaccurate information. If providers, medical debt or otherwise, contaminate the credit reporting system with inaccurate reports, the CFPB expects the big three agencies to cut off their access to the system.

• Work with federal partners to reduce coercive credit reporting: The CFPB works with the US Department of Health and Human Services to ensure that patients are not coerced into paying more than amounts owed. In January, the CFPB issued a compliance bulletin that reminded debt collectors, credit reporting companies and others that it is illegal to collect or report as due a debt that is not legally due and payable, including when the invoiced amount breaks the law without surprises. .

Monica Robins is the Senior Health Correspondent at 3News. The information provided in this column is for educational and informational purposes only. Always seek the advice of your physician or other qualified health care provider with any questions you may have regarding a medical condition or treatment and before embarking on any new health care regimen. Never disregard professional medical advice or delay seeking it because of something you read in this column or on our website.