It’s no secret that health care is expensive — and there are plenty of statistics that show how the rising costs of health care have become a major financial burden on millions of Americans — including those who have insurance. In fact, for years medical debt has been the number one reason people file for bankruptcy in the U.S. According to a 2016 study, about 20% of American adults had difficulty covering their medical bills — even with insurance coverage. On top of that, while many are forced to drain their savings to pay for an unexpected medical expense, many others simply don’t have the cash to cover it and the bill ends up in collections. One of the biggest concerns regarding medical debt has been the impact it has on an individual’s credit report and score — which can be devastating.
Good news for people facing medical debt
Starting on September 15, the nation’s three big credit bureaus — Experian, Equifax and TransUnion — will implement a 180-day waiting period before an unpaid medical bill can be included — and show up — on a consumer’s credit reports.
The idea is to give people more time to straighten out any potential errors or disputes with both medical providers and insurance companies.
When you dispute a medical bill, it can typically take a while to get it straightened out — and when the bill isn’t paid by the due date — you then face late payments, late payment fees and damage to your credit score (since the past-due bill is reported to the credit bureaus). This can then cause you even more damage — as a lower credit score can make it even more difficult, and more expensive, to borrow money, get a loan etc.