Ongoing Medical Debt Relief


The “big three” consumer credit reporting companies will change the way medical debt is reported to provide extended terms and a reprieve for those buried under the weight of healthcare debt.

Starting Friday, a joint move between Equifax, Experian and TransUnion is expected to remove nearly 70% of paid medical collection debt from consumer credit reports. Agencies will extend the deadline for reporting a medical collection from six months to one year and will not report any medical collections under $500.

This milestone comes after months of industry research with the goal of helping people focus on their personal well-being and recovery from the two-year COVID-19 pandemic.

Post Falls’ mother, Summer Johnson, said her family owed more than $40,000 in medical bills.

“I paid off old bills and it all rolled into one that I will pay forever — $200 a month,” Johnson said. “It didn’t stop buying a house, but it affects all other applications and loans. We end up paying higher interest rates. Medical debt is the only debt we have in collection. “

Johnson is one of more than 100 million Americans who experience some kind of medical bill debt.

Kaiser Health News in conjunction with National Public Radio recently conducted the Kaiser Family Foundation Health Care Debt Survey This shows a large share of health care debt, including medical and dental bills that people are unable to pay and different forms of growing bills – payment plans, credit cards, bank loans and borrowing from friends and relatives. The survey explores the effects of medical debt and the financial and personal sacrifices people have to make because of this debt.

According to the survey, 59% of adults with current medical debt said they think they can pay off their debt within two years, including a third who think they will pay it off within a year. Almost one in five, or 18%, said they don’t think they will ever pay it back.

About a quarter of black adults, adults with household incomes below $40,000 and those who are uninsured say they don’t think they will ever be debt free.

The survey found that medical debt repayment expectations vary widely depending on the amount of debt owed. Almost two-thirds of respondents who owed less than $1,000 said they expected to pay off their health care debt within a year. In contrast, 53% of those who owe $10,000 or more say they will never be able to pay it.

Shelly Woodward, executive director of revenue cycle operations at Kootenai Health, said Kootenai Health cancels millions of dollars in unpaid medical care each year. In 2021, that included $500,000 for those who couldn’t afford to pay, $8.1 million in rebates for uninsured patients, and $28.5 million for those who simply refused to pay liability. patient of their health care bills.

Kootenai Health has been removing fully paid accounts from patient credit reports for more than a year to prevent fully paid accounts from negatively impacting credit scores, Woodward said.

“As of July 1, this practice will become the standard nationwide,” she said. “Based on these new federal regulations, collection agencies must also wait 12 months to report unpaid medical bad debts to the credit bureau. This extension, along with an exemption for debts under $500, could make more likely that some patients will take longer to resolve their financial obligation to their doctor or hospital.”

She said many people don’t know that programs like Medicare and Medicaid don’t pay the full cost of care their participants receive.

“In 2021, that totaled an additional $176 million,” she said. “Unpaid care has a significant impact on Kootenai Health and other healthcare providers.”

She said that in most cases, lenders already take into account that medical debt is an unexpected bill and not something the individual initiated.

Derek Louw, Coeur d’Alene resident and credit consultant with Consumer Credit Auditors, said the change is an interesting development and could be good for consumers. He said the Consumer Financial Protection Bureau, which monitors consumer complaints, has seen a surge in complaints about medical collections.

“It can affect up to 20% of families in the United States,” Louw said. “The Consumer Financial Protection Bureau responded in April with a searing report highlighting the issues, many of which involve the use of collection companies to extort customers to pay medical bills that may not be accurate or even their own. Historically, I’ve seen that many consumers aren’t even aware of these bills until they arise during a credit transaction like a mortgage or a major purchase. time is running out and consumers are just blindly paying them to get things done.

He said the changes will give consumers more time to identify and process these bills. However, this has a downside.

“It’s voluntary and there’s no recourse if they don’t,” Louw said. “Unfortunately, these agencies have a very poor record of compliance. We’ll see how it works out. Fingers crossed.”


The Idaho Capital Sun contributed to this article.

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