Touching on “The Privilege of Paying for our Health” last week brought me a to a new update in the medical/financial realm: Settled Medical Debt is leaving Credit Reports starting this month! This is huge, as Medical Bills are not only the current #1 cause of bankruptcy, but even if they were eventually paid, they can deeply impact your credit score. We all know that lower scores mean lower opportunity (read: higher fees) when applying for a mortgage, car loan, credit card, etc.
Read below for details on the new policy, as well as a new law that protects people during emergent care.
What and Why the Change: Consumer Financial Protection Bureau (CFPB) studies have shown that medical debt is NOT a predicter of future payment default.
Starting July 1 2022, more than 70% of paid-off medical debt will be removed from credit reports by all three credit-reporting agencies (Equifax, Experian and Transunion).
In real numbers, as of June 2022, there is about $88B in medical debt currently hanging out on credit reports.
Presently, 58% of all bills in collections are medically related.
What to Expect Now:
Medical Debt that was paid-off after going to collections will no longer be included on credit reports.
Additionally, an Increase in the time period between the initial date of an unpaid medical bill and that information hitting your credit report will increase from 6 months to 1yr.
Prior to these changes, paid-off medical debt could stay on your credit report for up to 7 years.
More to Come in 2023:
Unpaid medical debt totaling less than $500 will no longer appear on credit reports at all.
What You Can Do Now:
Check your credit report at annualcreditreport.com. If you see any lingering medical debt that you know was resolved, you can report it as an error to the agency through which you’re viewing the credit report: Equifax, Experian or TransUnion. By law, the credit bureau must investigate your dispute within 30 days, and then they must send you the determination within 5 days of it being decided.
More Good News: A New Law!
Signed into law in 2020 and going into effect January 1 2022, the No Surprises Act protects consumers enrolled in individual or group health insurance plans who are seeking Emergent Care.
Under the new law your care will be considered In-Network even if you attend a facility for Emergency Care that isn’t.
Furthermore, even if you’re being treated at an In-Network facility and a provider gets involved who is Out-of-Network, you will be billed as if they were In-Network.
Caution: the new law does not cover ambulances by ground, only by air.
Be informed, share the news!
Unlocking Abundance 