We've all been to the doctor. If it's for a checkup, it's considered a planned visit. Many times we go to the doctor unexpectedly; most medical events are emergencies. My grandfather was a doctor and he never looked at his books to see what people owed because he said no one budgets to go to the doctor. I'm convinced no one budgets for anything.
Much to your horror, you may be surprised to find that your doctor bill can continue to cost you long after you've paid it.
Negative Medical Bill Collection Records Sabotage Your Credit Score
Okay, so you suddenly don't feel well, which is considered an uncontrollable event, and you have to go to the doctor who runs all kinds of tests, which partly explains why our medical costs are staggering. Next, the doctor's office submits the bill to your insurance company. As luck would have it, you disagree over the co-pay amount or the insurance company denies your claim; either of which aren't out of the ordinary. In 2008 a study was conducted that reported that 28 milliion Americans were contacted during a two year period by a collection agency regarding a medical bill. What ensues is a dispute situation while the bill goes unpaid.
In situations as these, doctors and hospitals are rather trigger-happy and impatient (please pardon the pun,) and quickly send your bill to a collection agency. The collection agency in turn reports the situation to the credit bureaus. Eventually the situation gets remedied (sorry for the pun again); however, it becomes a blemish (pun #3) on your record for a long time. Many years may go by, and you've totally forgotten about it. In the meantime, it can affect your credit score by as much as 100 points.
Getting a Home Mortgage Becomes Even Tougher
So that bill that was in dispute years ago is now the reason you were denied the mortgage in this toughened economy; or if you did indeed get a mortgage, you either paid higher fees or an inflated interest rate or had to make a heftier down payment. All this, despite the fact the bill was paid after it was in dispute for a few weeks. So our housing industry, in an already depressed state, is getting hammered in another way.
Good News: Medical Record Relief From Congress
A bipartisan group in Congress is sponsoring a bill that would mitigate the credit score impact of fumbled medical records by hospitals, doctors offices and insurance companies. The Medical Debt Responsibility Act, if passed, will require the three credit bureaus (Experian, Equifax and TransUnion) to delete settled medical records of $2,500 or less within 45 days of settlement.
Not everyone is on board with this, as many feel that any collection action signifies non payment of a debt.
Time will tell if this gets passed.
Can you think of a medical expense you incurred that was in dispute for any length of time?