Medical debt a harsh reality for millions of Americans
More than half of adults say it is hard to afford health care costs, according to a recent survey
(InvestigateTV) — A recent survey by Peterson-KFF found that Americans owe $220 billion in medical debt.
Patricia Kelmar with the U.S. Public Interest Research Group (PIRG) has been advocating that medical debt should be treated differently on credit reports.
“The problem when it comes to medical debt is medical debt is not an indicator of how fiscally responsible you are,” Kelmar explained.
Kelmar said even the most fiscally responsible person can rack up hundreds of thousands of dollars because of a serious injury or illness.
“People end up with thousands of dollars in medical bills, not because they went on a spending spree or they bought a fancy car,” she noted. “It’s because they got a cancer diagnosis or they were in a car accident. These are the kinds of things that put people into medical debt.”
That debt can impact financial security.
PIRG says nearly one in 10 people in the US have medical debt. This includes 11 million people who owe more than $2,000 and three million people who owe more than $10,000.
In addition to reducing credit scores, Kelmar said it can also have health related consequences since people might delay medically necessary treatment due to the cost.
“We encourage people to please go get the care that you need. Be quite persistent with the hospital or the doctor,” Kelmar urged. “Asking about financial aid policies – there are many subsidies for different types of insurance program you might be eligible for. So, ask those questions and see if you can get some of that medical bill covered through the financial aid policies.”
In 2023, the Consumer Financial Protection Bureau (CFPB) announced they were starting a rulemaking process to remove medical bills from Americans’ credit reports. They plan to issue the notice of proposed rulemaking sometime this year.
Until then, PIRG recommends that people check their credit report for three things:
Make sure credit cards don’t include any unrecognized medical bills.
“We know that medical bills are wrong all the time!” Kelmar continued,” It could be there’s a bill on that credit report that you don’t actually owe. So,take a close look at that.”
Medical bills less than $500 should not be listed on credit reports.
“So, if you see a debt on your credit report that’s related to medical bills that’s under $500, you can ask to have that removed,” Kelmar said.
Paid off medical debt should no longer be on a credit report.
If a report shows a consumer’s paid off debt, they should talk to their insurance company. The insurance company can help explain benefits and medical bills.
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