Medical debt has reigned supreme as the number one financial burden that leads to bankruptcy filings. A 2016 study revealed that approximately 43 million or 20 percent of American adults faced challenges in covering healthcare costs, including those who have insurance coverage.
Those who can pay unexpected and extremely high medical bills end up depleting their savings. Those blindsided by the costs that cannot cover the costs have their accounts placed in collections.
Disputing a medical bill seems to be a Herculean task for many. The waiting game causes balances to go past due, resulting in not only late payment fees, but also a lower credit score that creates obstacles in securing loans at affordable interest rates.
Relief is on the way. On September 15, Experian, Equifax and TransUnion will launch a program to help consumers take control of their medical debts. The three prominent agencies will provide consumers more time to fix errors and resolve disputes with medical providers and insurance companies.
Debtors will now have a 180-day waiting period before unpaid medical bills show up on their credit reports. They can use that time to have charges reduced or eliminated, pay the bill, or have the insurance company cover the expenses.
Another component of the new plan is to remove medical debt from credit reports and credit histories if the health insurance company ends up paying the bill.
While the extra time helps, changes will not help people who cannot pay their medical bills now or in the future. The account going delinquent will still show up on their credit report as unpaid debt. For them, bankruptcy may be their only option.