The three major credit reporting agencies announced Friday that they will strip 70% of medical debt information out of consumers’ credit reports, starting July 2022.
The bureaus — Equifax, TransUnion and Experian — say that medical collection debt will no longer appear on credit reports if that debt has already been paid. The agencies are also increasing how long it takes for that debt to appear on a consumer’s report, from six months to one year. And starting sometime in “first half of next year,” they will also remove unpaid medical collection debt from reports if it’s less than $500.
@gdale6 wrote:The three major credit reporting agencies announced Friday that they will strip 70% of medical debt information out of consumers’ credit reports, starting July 2022.
The bureaus — Equifax, TransUnion and Experian — say that medical collection debt will no longer appear on credit reports if that debt has already been paid. The agencies are also increasing how long it takes for that debt to appear on a consumer’s report, from six months to one year. And starting sometime in “first half of next year,” they will also remove unpaid medical collection debt from reports if it’s less than $500.
Some here will disagree with me here...and, of course, that's perfectly fine. Different minds, different perspectives.
-Rant to follow-
IMO, this is LONG overdue...and quite frankly, still doesn't go far enough.
Even people with "good" medical insurance get hammered with bills before deductibles are met and the insurance/patient payment split kicks in...and the fact that unpaid medical bills are being treated, collected, and reported as though they are unpaid loans is an OUTRAGE.
To treat medical debt like credit card/home/auto/etc. debt is flat-out wrong in multiple senses:
1. People being treated for medical purposes aren't explicitly taking out secured or unsecured debts. In most cases, they aren't even told what their share of the treatment costs are until days or weeks after the treatment...nor can they always be prepared for inflated bills that follow. Plus, you darn near need to be an accountant or mathematician to understand the gauntlet that is medical billing.
And even if we COULD tell folks to the penny what their share of the costs is, are we telling them to go home without treatment if they can't pay...or are we telling them to torpedo their own credit in order to get treated?
2. Unlike other forms of voluntary credit, positive medical payment activity isn't reported to the bureaus. Until this development, I could pay $49,501 of a $50,000 bill...and the only thing potential creditors would see is the $499 that I couldn't pay when it appears in the form of a collection.
3. Medical collections aren't really designed to pay the providers en masse, per se. Most medical debt is written off and sold to bottom-feeding, 3rd party collection agencies or collection "attorneys" who exist only to carpet bomb the working poor with demands for payment, threats to their credit, and/or lawsuits in pursuit of summary judgments.
That these sorts of bottom-feeders will have to move to different gutters to eat really won't have me losing sleep.
Now, it's important for folks to remember that even though the three bureaus won't report these debts, legally-collectable debts are still subject to a variety of collection activities.
It's just that now collectors cannot simply torpedo your credit reports to passive-aggressively get you to pay them.
-End of rant-
