Medical Debt Damages Consumers’ Credit Scores
By Consumers for Quality Care, on August 3, 2022
Consumers that fall into medical debt after their health insurance doesn’t cover expected medical expenses can find their credit score suffering as a result, according to Kaiser Health News.
Joe and Amanda Pitzo learned this firsthand when Joe was diagnosed with brain cancer in 2018. While the Pitzos had health insurance through Joe’s employer and verified that his care was in-network, they were still hit with $350,000 in medical bills from the surgery. This is because the surgeons used a device during his surgery their insurance company said was “medically unnecessary”.
Joe stated, “This just took a major toll on my credit, it went down to next to nothing.”
A study conducted by Kaiser Family Foundation found nearly two-thirds of Americans with medical debt had expected their health insurance to cover the cost of their care and treatment. When saddled with unexpected bills, consumers’ credit scores are often drastically impacted. In Joe’s case, his overall credit score decreased by several hundred points.
A recent poll from Impact Research and Public Opinion Strategies on behalf of CQC found that 71 percent of consumers agreed that unpredictable out-of-pocket costs make it impossible to know how much their health care will cost. As a result, millions of Americans are stuck with expensive bills and medical debt due to higher deductibles, premiums, and other costs.
Previously, the three largest credit agencies in the United States announced they would stop using small past-due medical bills when calculating credit scores. CQC calls on regulators, lawmakers and insurers to work together to find solutions to make quality health care more affordable and help patients avoid crushing medical debt.