Kimberly Palmer: How to handle your medical bills
Medical bills can quickly become overwhelming, but consumers often have more power than they might think when it comes to navigating them
When she was 19, writer Emily Maloney found herself facing about $50,000 in medical debt after hospital treatment for a mental health crisis. The debt followed her throughout her twenties, hurting her credit and leading to stressful calls from collection agencies.
Her experience is all too common: The Consumer Financial Protection Bureau reports that about 1 in 5 U.S. households carries medical debt. People with medical debt are more likely to face anxiety, stress or depression and avoid filling prescriptions because of the cost.
The risk of “medical debt looms over every consumer and impacts their lives,” says John McNamara, assistant director of consumer credit, payments and deposits markets at the CFPB. He adds that recent changes to the way medical debt is reported by credit bureaus should help consumers: Paid medical debts will no longer show up on credit reports and no new medical debt will show up until 12 months have passed (up from six months). In addition, in the first half of next year, the credit bureaus will stop reporting unpaid medical debts under $500.
Eventually, Maloney’s debt was resolved through a combination of a helpful customer service representative and exceeding her state’s statute of limitations. She wrote a book, “Cost of Living,” based on her experiences. She wants to assure others facing medical debt that they can take steps to reduce it.
