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Welcome to the Credit.com newsletter!
This free newsletter delivers easy-to-read tidbits about credit
directly from personal finance experts. In this issue, we're dissecting medical debt issues. We'd love
to hear from you! Send us an
email
with your credit questions or comments
anytime! |
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Quick Tip
Medical bills can be difficult to understand. To make matters worse, insurance companies and medical offices often mail statements that contradict each other.
FamilyDoctor.org has created a helpful guide to help you sort through statements, bills and explanation of benefit letters.
Learn to decode medical bills |
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Ask John
Medical collection accounts have the same negative impact on your credit as any other collection debt.
Using his experience as a credit industry insider, John reveals how medical collection accounts work and why credit scoring policies aren't likely to change.
Read more about medical collections |
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On the Blog
Medical billing offices should be trained on personal finance and credit topics so they can more effectively deal with patients.
In this post, Emily Davidson urges financial departments at hospitals, doctor's offices and insurance companies to get smart about credit.
Read tips for
medical billing departments |
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It is impossible to ignore the financial crisis is the US health care system.
46 million Americans don't have health insurance. And even for those of us with insurance, hospital bills can be incredibly expensive. Credit.com is dedicating the month of May to studying this issue and helping people who are struggling with medical debt.
The Issue
An estimated 77 million people (37% of adults in America) have difficulty paying their medical bills. 50% of people who declare bankruptcy every year cite medical debt as a primary reason for their financial hardship, despite the fact that they had insurance. American patients pay much more than residents of other western nations and get worse quality care. 66% of people with medical debt go without needed medical care, in some cases endangering their lives.
These shocking statistics demonstrate just how unaffordable medical care can be. A new must-read Credit.com article investigates these issues and includes the true story of a high school student with a rare bone disease who can't afford necessary treatment.
The Impact
Expensive medical bills don't just hurt a patient's bank account; they can also cause long term credit and financial damage. Credit cards are a convenient way to pay for unexpected medical bills, but they can also lead to unmanageable debts.
It is becoming increasingly common for hospitals and health care providers to sell unpaid medical debts to collection agencies. The resulting collection record can destroy a patient's credit reports and credit scores for seven years.
Paying the medical bill later doesn't cause the collection record to be removed from a credit report. Many consumers end up with a collection account because they don't understand that they are ultimately responsible for the medical bill, even if their insurance should have covered the cost.
The Strategy
The
best way to protect yourself is to be covered by the highest level of health insurance that is available to you.
Even then, prepare for some big bills. A health savings account can help with your health care costs and can save you on taxes.
If insurance isn't an option, investigate if you qualify for financial assistance or can set up a payment plan with the provider. A low rate credit card or personal loan can also help if you don't have the cash to pay a bill right away. Read more tips for dealing with medical costs online.
The Solutions
There has recently been a big push to reform hospital charity care programs.
Hospitals receive large tax breaks for agreeing to provide free and low-cost service to patients who can't afford it. But recent studies have found that many hospitals are negligent in
actually providing it to patients.
If the cost of medical care is an issue close to your heart, write your political representatives to let them know. The Senate Committee on Health, Education, Labor and Pensions is a great place to send your letter.
Do you have a question about medical debt or a story to share? Send our team of credit experts an email at tidbits@credit.com.
Quote of the Month
"We Americans live in a nation where the medical-care system is second to none in the world, unless you count maybe 25 or 30 little scuzzball countries like Scotland that we could vaporize in seconds if we felt like it."
- Dave Barry
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