Questions About the New Rules for Medical Debt in Collections…

[ThomasJNewton]

Having read the press releases several times, I am still not clear about the new rules. I understand that paid amounts will get removed, but my questions are about unpaid amounts under $500. I have seen several different explanations as to whether the new rules for amounts under $500 apply only to new collections going forward, or if they apply to accounts already reported. I am also unclear as to when the new rules take effect. Anyone understand this well enough to clarify?

Basically, will existing medical collections under $500 still appear credit reports or not, and if it will be removed, when will that happen?

[Remedios]

Medical collections under $500 will not report at all, and existing medical collections under $500 are supposed to be removed. 

 Over $500 will report but not before one year passes from when account became delinquent. Medical bill is typically past due after around 3 weeks from when statement generated. 

[gdale6]

These new rules have already taken effect. All paid medical collections no matter who pays get deleted. As already stated under 500 are not to be reported at all.

[ThomasJNewton]

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@Remedios wrote:

Medical collections under $500 will not report at all, and existing medical collections under $500 are supposed to be removed. 

I have several friends with Medical debt that is under $400, and yet still shows up on their credit reports. That was why I asked in the first place. Is there some process to follow to have it removed?

 Over $500 will report but not before one year passes from when account became delinquent. Medical bill is typically past due after around 3 weeks from when statement generated. 

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That is good. I wonder if these new rules will make it easier to get medical debt collection agencies with debt under $500, to settle for less. Essentially, if they can never report, and are not likely to sue, would the be happier with $100 now, rather than hoping that someone will choose to pay basically uncollectable debt in full later?

[MT64]

First half of the year is what I read (as 2 of mine are still showing up on my reports) but that could mean anything. First half could be 6 months in, 2nd half the other 6 months. Seems very loosely in the air with no concrete clarification as to when. The thing I'm noticing on mine are that under account type they are listed as OTHER, despite being medical. I'm not sure if that's going to create an issue for a lot of people assuming these will just magically fall off.

Can anyone here confirm if your unpaid medical debt under $500 has been removed and if so, when and if the account was listed as OTHER? Thanks!

[ThomasJNewton]

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@MT64 wrote:

First half of the year is what I read (as 2 of mine are still showing up on my reports) but that could mean anything. First half could be 6 months in, 2nd half the other 6 months. Seems very loosely in the air with no concrete clarification as to when. The thing I'm noticing on mine are that under account type they are listed as OTHER, despite being medical. I'm not sure if that's going to create an issue for a lot of people assuming these will just magically fall off.

That was my problem as well, and why I asked. The friends that still have debt showing up, want to make settlement offers, but I told them not to do anything until it has been removed from their reports.

Can anyone here confirm if your unpaid medical debt under $500 has been removed and if so, when and if the account was listed as OTHER? Thanks!

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As I said, I know of at least two or three friends who have some medical debt under $500 on their reports. I would also like to know if anyone has had some removed and if so, did it just happen automatically, or was there a process to have it done. Thanks in advance.

[MT64]

@ThomasJNewton 

Well, a huge thanks to this thread for pushing me into a shove!

Instead of just assuming it would fall off and due to the lack of actual concrete answers, I decided to first pull my credit reports yesterday and then seek some answers from the horses themselves, the horses being the Big 3. The medical collections were being reported on both Experian and Transunion but not Equifax. I proceeded to call both Experian and Transunion to get an answer.

While it was impossible to speak to a live customer rep on the phone with Experian (simply was not an option), I did get a live agent with Transunion thankfully. I explained that I wanted to not only confirm when the medical collections under $500 were falling off this year due to the new rules but also wanted to make sure they were being reported correctly since the accounts were listed as OTHER and not medical, despite clearly being from medical outlets in the description.

Fantastic news! She told me that they would fall off at the end of June but I could dispute it now and they would remove it immediately since they did indeed fall under the $500 ruling and that it would be off my report within 7-days! This prompted me to continue to create a free account with Experian and dispute both the medical collections listed for the same reasons under OTHER. Amazingly, the very same day, they were not only removed but as a result, it increased my Experian score by 31 points!

Had no idea that 2 very minor medical collections would make such a drastic difference but 31 points is nothing to shrug shoulders over. Very happy with the outcome and surprised at the turnaround speed in which it was removed!

Cheers!

[ThomasJNewton]

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@MT64 wrote:

@ThomasJNewton 

Well, a huge thanks to this thread for pushing me into a shove!

Glad to help!

Fantastic news! She told me that they would fall off at the end of June but I could dispute it now and they would remove it immediately since they did indeed fall under the $500 ruling and that it would be off my report within 7-days! This prompted me to continue to create a free account with Experian and dispute both the medical collections listed for the same reasons under OTHER. Amazingly, the very same day, they were not only removed but as a result, it increased my Experian score by 31 points!

What did you list as the reason for the dispute?

Had no idea that 2 very minor medical collections would make such a drastic difference but 31 points is nothing to shrug shoulders over. Very happy with the outcome and surprised at the turnaround speed in which it was removed!

Cheers!

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Glad you got such a great result. Now I will have to tell my friends what to do to accelerate the process. :-)

[MT64]

@ThomasJNewton  What did you list as the reason for the dispute?

I just listed that they were medical accounts under $500 listed as 'other' that should be removed.

Thanks!

[ThomasJNewton]

@MT64 wrote:

I just listed that they were medical accounts under $500 listed as 'other' that should be removed.

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Told my friends what you said and they did the same thing. Transunion collections came off immediately, Experian is still "under review". Thanks for the information.