Nearly one in five households in the United States has reported experiencing some form of overdue medical debt. Patients and their families often find themselves contacted by debt collectors regarding medical bills more frequently than any other type of debt, leading to negative information appearing on credit records. In 2021 alone, approximately 43 million individuals reportedly had unpaid medical bills listed on their credit reports.
In response to the medical debt crisis affecting millions of families, Congress, federal agencies, and other entities have taken measures to address the issue. Congress passed the No Surprises Act, designed to safeguard Americans from certain unexpected medical bills, including surprise charges for emergency services from out-of-network providers. Furthermore, the Consumer Financial Protection Bureau (CFPB) instructed debt collectors and consumer credit reporting companies not to collect, furnish, or report any invalid medical debt.
The three major nationwide credit reporting companies – Equifax, Experian, and TransUnion – have also taken significant steps to address this issue. They have removed all paid medical debts from consumer credit reports, along with those less than a year old. Additionally, they have initiated the removal of medical collections under $500. This final measure came into effect on April 11, 2023, and it is estimated that approximately half of those with medical debt on their reports will see it removed from their credit history.
If you are among the millions of Americans burdened by overdue medical bills, there are steps you can take to mitigate the impact on your credit and overall financial standing.
- Check your credit report: Utilize the free online credit reports required by Equifax, Experian, and TransUnion through AnnualCreditReport.com. Verify that any outstanding medical bills, paid medical collections, or collections less than a year old have been removed from your reports. Keep in mind that credit card collections, even for medical expenses under $500, are not included in this removal.
- Address inaccuracies: While reviewing your reports, check for any other inaccurate information. If you identify medical collections under $500, paid medical collections, collections less than a year old, or any errors, you can dispute this information with the credit reporting company.
- Be aware of extended dispute timeframes: The nationwide credit reporting companies have extended the timeframe for disputing, negotiating, or paying outstanding bills before they can be reported. Medical debt is now allowed to appear on your credit report one year after your visit to the doctor, as opposed to the previous 60 to 120 days.
- Explore financial assistance options: If you are unable to pay your medical bills, you may qualify for financial assistance programs commonly referred to as “charity care.”
If you encounter difficulties resolving medical debt concerns or disputing errors with credit reporting companies, you can submit a complaint to the CFPB. The No Surprises Act, along with recent actions by credit reporting companies and guidance from the CFPB, aims to alleviate the challenges faced by families following medical care. The CFPB remains committed to ensuring that credit reporting companies fulfill their obligations and investigate disputed information effectively.