These days, many consumers may go to the hospital or a doctor’s office and receive care, but not know that their treatments carry with them bills that aren’t covered by insurance or other health plans. This lack of knowledge can, in turn, end up costing them dearly.
Today, some estimates show that as many as 40 percent of consumers have some sort of medical debt listed on their credit reports, and often, those balances are there without the borrower’s knowledge, according to a report from the Columbus Dispatch. As such, those debts may go unpaid for months or more, and end up being sent to collections, where their delinquency can haunt them for years.
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A study by the Commonwealth Fund, an organization dedicated to improving healthcare systems, found that in 2010, as many as 30 million people across the country received calls from collections agencies related to unpaid medical bills, the report said. That was up from just 22 million in 2005, an increase of 36 percent in just five years. Further, a study by the Federal Reserve Board in 2003 found that while about 31 percent of all consumers’ credit reports had debts in collections listed on them, about half of those were the result of outstanding medical bills.
Worse is that many consumers don’t know about these obligations until the bill has already been handed off to a collections agency, at which point they may have far less recourse for dealing with the accounts, the report said. Fortunately for these borrowers, federal lawmakers are now exploring options for trouble consumers who are dealing with medical debt.
“The consumers in this country are fighting an unknown entity,” said U.S. Rep. Don Manzullo, an Illinois Republican, at a House Financial Services Committee hearing last month, according to the newspaper. “In time after time after time again, things show up on the credit report and people have no idea it’s on there.”
Debts like these, and other obligations borrowers may face over the course of their lives, highlight just how important it is for consumers to regularly order copies of their credit report and check them over closely to see what accounts may be listed in their names. This will help to make them aware of anything they may not recognize or want to dispute with the lender in question.
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Image: Adrian Clark, via Flickr