Medical Debt – A Pain in the BLANK
According to a new government report from the Consumer Financial Protection Bureau, 1 in 5 Americans has unpaid medical debts, and much of it, apparently, could be avoided. The report also states that about half of individuals carrying medical debt have no other financial distress in their life or on their record, and the average debt is only $579.
Even if your debt is that low and the only debt on your credit report, it’s still enough to lower your score by up to 20 points (and raise your blood pressure by even more).
Medical Debt – Confusion-itis
Consumers with medical debt tend to be much more reliable bill payers and normally meet their other financial obligations, the report also stated. These otherwise responsible citizens become confused by the multiple notices they receive from various providers. Costs also have a tendency to change depending on whether the consumer has insurance and whether the doctor is in that insurer’s network.
It gets even more confusing because the amount owed can change depending on whether the individual has met their annual cap on the deductible or what they are required to pay out-of-pocket. Then, many of these same consumers get a nasty surprise when they go for a home or auto loan and find their credit score has taken a hit.
And, just to make things worse, there is no standard practice of when overdue debt is sent to a collector or credit report agency. Certain debt collectors will immediately “park” the debt on someone’s credit report as a means to get them to pay up. Some healthcare providers send unpaid bills to collectors after only 30 days out from initial billing, others wait 180 days.
What You Can Do To Fix Medical Debt
Even responsible people with coverage and savings can find themselves with medical debt, which is different from other types of debt because getting sick or injured comes with unexpected costs.
Consumers are advised to pay off the debt as quickly as possible. Make payment arrangements if you have to, and see if you are eligible for Medicaid assistance. Although it’s not the most ideal situation, if need be, put your debt on a low-interest credit card to keep it out of collections and keep your credit from taking a hit.
Then take two aspirin and wait for the throbbing cranial pains to subside.