One in three people have medical debt. That is a stress that works against people in many ways, first stress creates more health issues. Second medical debt that can't be paid, or paid timely that ends up on a credit report can hold people back from the opportunities they need, to get ahead, to pay the debt. And third many people choose to not seek medical care because they already have medical debt, or know they won't be able to pay for the diagnosis, care, treatment, prescriptions.
Today Vice President Kamala Harris is announcing the White House plans for reform on the following 4 areas.
You can see the fact sheet from the White House here: https://www.whitehouse.gov/briefing-room/statements-releases/2022/04/11/fact-sheet-the-biden-administration-announces-new-actions-to-lessen-the-burden-of-medical-debt-and-increase-consumer-protection/
U.S. consumers held about $88 billion in medical debt as of June 2021. Americans turn to crowdfunding for a variety of reasons such as an unexpected health-related event, lack of insurance coverage, or deferring their medical bills in order to pay for other essential bills.
What is "crowdfunding"? It's when you see something on social media that is a "GoFundMe" type post that is asking for others to donate money to help pay for something. Very often it's to help pay final expenses when a person dies unexpectedly, or for a very expensive medical solution.
Very often these expenses are in states that did not expand Medicaid.
Yahoo Finance did a full story on this recently titled - Americans crowdfunding for medical debt is 'insane' — and inefficient, experts find it's a good quick read, with data and good graphics too.
Link to the story - https://finance.yahoo.com/news/medical-debt-crowdfunding-114508030.html
Last week it was announced that there are some big changes coming to how medical debt will be reported on your credit, and many scores will be going UP because of it.
In fact nearly 70% of medical debt will be removed.
Here are the big changes:
July 1, 2022 paid medical debt will be removed from scores. That's important because for many it will remove late payment marks against them.
Credit reporting agencies will wait for 1 year (instead of the current 6 months) to report it on your credit. That can give a person more time to pay the debt instead of showing the collection.
And in 2023 none of the agencies will be reporting any medical debt under $500
Here is their statement. Equifax, Experian, and TransUnion Support U.S. Consumers With Changes to Medical Collection Debt Reporting
The Consumer Financial Protection Bureau, (CFPB) has shared the prepared speech of Director Rohit Chopra on Medical Debt, Bills, Billing and Collections.
You can read the remarks directly here:
Prepared Remarks of Director Rohit Chopra on New CFPB Medical Debt Report
Link to the article:
Medical debt is a huge burden for people in the United States. Not only is it a major stress factor for many, but it also ends up on people's credit. Add to that the collection fees and the problem continues to grow and can feel unsurmountable for many.
Perhaps one of the best pieces of advice in the article was this quote:
“When you get a bill, assume [the total is] wrong,” said Caitlin Donovan,
A disappointing place, but probably the right one to begin every overview of your medical bills.
CNBC had this article out this past week, and it's titled: How to tackle medical bills before the debt becomes a long-lasting financial problemwww.cnbc.com/2022/03/03/how-to-tackle-medical-debt-before-its-a-long-lasting-financial-issue.html
If you are one of the many that is struggling under medical debt, make sure and check out the article.
Link to the article: