Consumer Agency Moves to Ban Medical Debt From Credit Reports

The agency’s proposed changes come as it faces a legal challenge to its authority before the U.S. Supreme Court. Arguments in the case are expected to be heard this coming week, with a decision sometime next year.

Here are some questions and answers about medical debt:

What should I do if I can’t afford to pay a medical bill?

If you lack health insurance, check to see if you qualify for coverage under Medicaid, the federal-state health program for low-income people, or ask if you qualify for patient assistance programs that can reduce the amount you owe, said Chi Chi Wu, a senior attorney at the National Consumer Law Center. Nonprofit hospitals are required to offer the programs to maintain their tax-exempt status, she said, but criteria vary and some hospitals may make it burdensome to enroll.

Be cautious, Ms. Wu said, if a provider offers you special financing to pay your medical bill. These credit cards sometimes come with deferred interest, which can greatly increase the amount you owe if you don’t pay off the bill by a certain deadline.

If you do have health insurance, ask for a detailed bill and compare it with the “explanation of benefits” provided by your insurer to make sure the bill accurately reflects the care you received and what you owe, said Ms. Holloway at Tzedek DC. And keep medical debt in perspective when managing bills, she said. Give priority to paying bills like rent or a mortgage, and your car loan, over paying the medical debt.

For more patient resources, check online at RIPMedicalDebt.org.

Should I pay medical bills with my credit card?

If you worry that you can’t ultimately afford to pay the bills, you should avoid paying with a traditional credit card, Ms. Wu said. Once the debt is on a card, you may have to pay higher interest and owe late fees if you can’t pay the debt on time. Plus, the debt isn’t identified as medical debt, so it may not be eligible for current and proposed protections. (Colorado, however, does include debt on specialty medical credit cards under its medical debt reporting law.) Nearly a quarter of adults with past-due medical bills reported paying all or part of their bills with a credit card and were later unable to make the minimum payment, according to the Urban Institute, a Washington think tank.

How can I tell if medical debt has been improperly included on my credit report?

Get a copy of your credit report at www.annualcreditreport.com. The major credit bureaus have ”permanently extended” their offer of free reports weekly. (Federal law requires free reports annually.) If you see a medical collections debt that you believe shouldn’t be there, file a dispute with the credit bureaus. You can also file a complaint with the consumer bureau.