When Medical Bills Hurt Your Credit Rating

Kaiser Health News writes:

While medical bills are a leading source of personal bankruptcy in the United States, a far more common problem is the widespread damage they do to people’s credit. Almost 40 percent of adults younger than 65 reported a lower credit score because of medical debt, according to the most recent Commonwealth Fund analysis, based on 2016 data.

That means greater difficulty with transactions such as financing mortgages, taking out student loans or purchasing cars.

Medical debt isn’t like other financial obligations.

It might result from unplanned illnesses and accidents, or because consumers do not fully understand the intricacies of a health plan. Good coverage is not necessarily sufficient to shield someone from considerable costs. It can take months of negotiation and processing for consumers to know what they actually owe.

Left unpaid, these bills are ultimately sent to collections agencies.

Eventually, that medical collection dings the patient’s credit, staying for as long as seven years, depending on state laws.

Read the entire piece for an interesting case study of a Massachusetts family.

For more information on the issues surrounding medical debt, please contact RIP Medical Debt.