Medical Debts Continue to Impact Credit Reports
Continued disputes between consumers, healthcare providers and health insurance firms have created serious medical billing issues. In many cases, consumers’ credit reports are being harmed through no fault of their own.
During the past several years, the medical billing process has become much more complex, the New York Times reports, creating confusion for people wondering what bills they may or may not have to pay.
At the same time, hospitals and doctors have become more willing to report bills to collections agencies. Bills in collections can seriously hurt a credit score for years.
“It used to be that the mantra was ‘gentlemen and physicians rarely discuss matters of money,’ ” Dr. Jeffrey Hausfeld, who also co-owns FMS Financial Solutions, a collection agency that specializes in medical debts, told the Times. “But that has changed now.”
Many of those issues are also the result of mistakes. The paper says research by the nonprofit Commonwealth Fund found that collections agencies called 9.2 million people in 2010 because of billing errors.
Proposed Law Addresses Issue
Some lawmakers feel that medical debts are very different from other bills, and have proposed a bill to address it. The Medical Debt Responsibility Act would require credit agencies to remove medical debts from credit reports within 45 days of them being settled.
However, other groups have said that removing that information would compromise a person’s credit history, and make credit scores less important as a whole.
How To Prevent Medical Bills From Hurting Your Score
While that legislation might help people improve their credit score ratings, it may never be passed. However, there are some things you can do to raise your credit score and prevent medical bills from being a negative.
Review Your Bills – Whenever you get a medical bill that seems to indicate payment is due, contact your health insurance company. It’s possible that the hospital made an error and the insurer should pay off the bill. If the bill ends up being your responsibility, pay it off as soon as possible so it doesn’t go to collections.
Dispute the Debt – From the time a debt collector contacts you, you have 30 days to dispute the debt. When that happens, they are supposed to verify that the debt is justified.
Have it Removed – If you prove that the debt isn’t valid, then you can ask to have it deleted from your credit report.
Keeping your medical bills organized and making sure any unfair debts are removed from your credit report will help keep your scores in good shape. As always, if there’s anything on your report that doesn’t seem right, contact the credit agencies to make sure it’s not an error.