By MARY ELLEN KALZUA
No, President Biden is not forgiving them. Sorry. The good news is that beginning July 1st, paid medical bills will no longer appear on your credit reports. The three major credit bureaus also announced that starting July 1, medical bills now have to be a year old (previously 6 months) before they can be reported. Plus, starting January 2023, only medical bills $500 or more will be reported.
The announcement came after the Consumer Financial Protection Bureau (CFPB) released findings that medical bills comprise the majority of reported collection accounts, to the tune of $88 billion, keeping credit scores down like a cement block in water. I’ve seen credit scores drop nearly 100 points from a medical collection of less than $25! A 100 point drop is devastating. It means a person may suddenly no longer qualify for a mortgage or be able to rent. They have to pay more for car insurance and their phone. They are charged higher interest rates, which can mean paying hundreds or thousands of dollars more than before that medical bill hit their credit reports. And, even if someone paid that collection immediately, it could still be on their report for 7 years. Talk about kicking us when we’re down.
So, yes, this is good news. The cruel “But” is, reported or not, the bill still exists. Ignoring medical bills never makes them go away. Bills over $500 will eventually be reported. Collections can end up as judgments, which last 10 years and can be renewed! Judgments open a person up to bank account and wage garnishments. It doesn’t take a lot of imagination to see where that leaves a person. Tax refunds can be captured. Patients can be denied care from a provider due to unpaid bills. Sadly, we still have a battle to fight before we have an affordable healthcare system.
Until then, here are some steps you can take to (maybe) avoid the nightmare:
- If you don’t understand the bill or don’t agree with it – contact the provider. Take detailed notes and keep documents. Request an itemized bill. File a complaint with the Minnesota Attorney General’s office: (651) 296-3353.
- If you agree you owe the bill, ask about financial assistance. There will be an application process and income limitations.
- Request an affordable payment plan. Don’t agree to more than you can afford. But expect to pay more than you may want to pay.
- Oftentimes, it is easier to negotiate affordable payments with the collection agency rather than the medical provider.
- If an insurance company denies the claim, contact them to find out why and how you can appeal.
- The MN Department of Commerce is the next step when denied the appeal: 651-539-1600, consumer.protection@state.mn.us.
- Seek more guidance from a NFCC Certified Financial Counselor.
Affordable healthcare will only come through agitation. Contact your elected representatives. And vote.
Mary Ellen Kaluza is a Certified Financial, Housing, and Reverse Mortgage Counselor
