The tab for unpaid medical bills in the U.S. is in excess of $50 billion and much of it is sold to collection agencies. Much of this debt is unpaid and ignored, but not all. Some bills are paid, alas the credit report damage is already done and scores are negatively affected.
However, changes effective July 2022 indicate that paid medical bills will no longer negatively impact credit scores. Perhaps unpaid medical bills that were once delinquent, and were once hurting a credit score, will not any longer. Consumers with credit challenges might have had previous issues with housing, loans and credit cards in the past, but things could get better because medical dings will vanish. Also, part of this update is that medical bill debt less than $500 will no longer be reported.
Some medical bills may seem insurmountable, but that’s not always the case, and the goal is to negotiate before the bill is sold to a collection’s agency:
Negotiate with the medical provider because most will prefer to get paid something rather than nothing at all.
Research independent advocates and government agencies such as IP Medical Debt, HealthWell Foundation and the Patient Advocate Foundation who work with consumers to pay medical debt. And for those that qualify—consider Medicaid.
Investigate debt consolidation and find out if it’s a viable solution.
Medical bill horror stories typically come at the worst time which is shortly after someone has been in the hospital. However, it’s important to be aware of the valid, and invalid reasons—paid medical bills are no longer part of the problem.