When you don’t pay your medical bills, it can harm your credit report. You may also get calls from debt collectors, and the parties you owe money to may try to take legal action against you.
Although medical bills can be expensive, you must pay them on time. An attorney from our firm can assess your case to determine your best options for paying off your medical expenses.
Understanding How Medical Debt Can Affect Your Credit Report
Medical debt can remain on your credit report for seven years. It won’t be reported if your debt stays with the original service provider. However, when medical debt goes to a collections firm, it will be reported and cause your credit score to lower.
Typically, your provider will keep the debt until it is more than 90 days past due. If you work with the service provider, you can enter a payment program to keep the debt out of collections. It is also a good plan to check your credit report periodically to verify the validity of entries. Always report errors to the credit reporting agency, the billing agency, the insurance company, and the collections firm.
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Recent Changes in Credit Reporting Help People With Medical Debt
The three major credit reporting agencies changed medical debt reporting effective July 1, 2022. One change is that paid medical debt will no longer show on your credit report. The period for reporting past due debt was increased from six months to one year. This change accounts for insurers’ slow response, allows appeals processes to proceed, and allows extra time to pay the debt.
In 2023, credit agencies will not show a medical debt of less than $500 on your credit report. The changes in reporting medical debt help consumers with unexpected costs due to accidents or catastrophic illnesses.
The No Surprises Act (NSA)
Another part of the changes enacted in 2022 is the No Surprises Act (NSA). In the past, when insured people received emergency services, they might receive surprise bills with out-of-network charges.
The No Surprises Act protects you from being billed for the difference between what your insurance pays and the out-of-network bill amount. Not all services are protected under the No Surprises Act, but the provisions may help reduce your debt.
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Debt Forgiveness Programs Can Help You
To keep unpaid medical debt from affecting your credit report, you could work with debt relief programs to pay down or eliminate the debt. Some available options may include the following:
- Negotiating the bill to a more affordable amount
- Entering interest-free repayment plans with the service provider
- Finding nonprofit organizations that assist with medical debt
- Using a credit card to pay the debt (not recommended due to high-interest rates)
It is an excellent practice always to verify medical bills. Some billing agencies will include extra charges you can negotiate out of the account if your insurance doesn’t cover the expense.
Many hospitals offer programs that can assist in creating viable payment options. You can inquire about a specific hospital’s payment programs with its billing department. Hospitals provide a service and expect payment, but they also understand that medical costs can quickly become overwhelming.
In cases where a hospital doesn’t offer payment programs, they may be able to refer you to outside organizations that can assist.
Under the Affordable Care Act (ACA), any hospital that maintains a 501(c)(3) nonprofit status is required to assist patients needing help paying medical bills. Sometimes referred to as “charity care,” these programs offer free or reduced pricing to patrons who need help.
Government Assistance for Medical Debt
If you are a senior covered under the Qualified Medicare Beneficiary (QMB) program, you may have protection from piling medical bills. If you are receiving bills, you should contact your Medicare representative.
Veterans groups offer some relief for medical debt in cases of financial hardship. You can learn about these programs by contacting your local U.S. Department of Veterans Affairs (VA) office.
Your community may offer additional services at the municipal or state level. Most hospitals will supply you with information on how to contact agencies that can assist with medical debt.
Contact Farmer & Morris Law, PLLC for More Information About Your Medical Bills
If you are struggling with overwhelming medical debt, consider discussing the matter with a lawyer from Farmer & Morris Law, PLLC. Our team is compassionate, and we understand how stressful it can be to have crushing debt.
Contact our team to discuss your medical bills. We can explain how our firm can work with you.