Common Debt
The most common debt consumers face are health care related costs, or medical debt. One in five Americans face the daunting reality of having medical bills in collections.1 Consumers who have significant medical needs, for example, those living with cancer, have higher levels of medical debt that continues to grow over time.2
Credit Reports
Medical debt can also affect one’s credit reports. A surprise medical bill is an unexpected bill that usually comes from when you unknowingly use a provider that’s out-of-network.3 This results in the consumer having to pay the difference from insurance only paying a portion of the bill and the consumer having to pay the rest. The No Surprises Act which passed in 2022 protects from such surprise billing by banning no prior authorization for out-of-network emergency services; out-of-network cost sharing; and some out-of-network charges that are provided in an in-network facility.
Furthermore, the credit reporting agencies (Equifax, TransUnion, and Experian) have removed all paid medical debt from credit reports and debts less than a year old. Beginning April 11, 2023, the credit agencies have also begun to remove medical collections debts that are under $500.4
To ensure that such medical debt has been removed from your credit report, you can review your free online credit reports at AnnualCreditReport.com. You can also call (877) 322-8228 to request your reports or you can complete and mail the Annual Credit Report Request Form to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281, to receive credit reports via mail.
Due to the ongoing COVID-19 Pandemic, you can still request all three credit reports once a week, until the end of this year. When reviewing your credit reports, check that medical debt under $500, paid medical collection debt, or medical collection debt less than a year old, do not appear in your reports. If you find any discrepancies, dispute this with the credit reporting agency.
1 https://files.consumerfinance.gov/f/images/cfpb_medical-debt_infographic_2022-04.original.jpg
2 https://www.healthsystemtracker.org/brief/the-burden-of-medical-debt-in-the-united-states/