A new law aims to shield Americans from the financial burden of medical debt by preventing its reporting to credit agencies. This means unpaid medical bills will no longer negatively impact credit scores, potentially easing financial stress for millions.
Patients across the country skip medical care due to cost. Those who do seek help may end up with unpayable balances that hurt their credit score s and lead to long-term financial burden s. However, a new law will prohibit health providers and debt collectors from reporting medical debt information to credit agencies. This means unpaid medical bills should no longer appear on credit reports, which consumer advocacy groups see as a benefit for patients with debt.
The law does not forgive debt, but keeping it off credit reports may provide reassurance that a hospital stay or urgent care visit won't later impact credit standing. Lower credit scores typically result in higher interest rates and make it harder to qualify for housing, car loans, or even employment. Supporters of the law argue that because people don't choose to have medical emergencies or illnesses, this type of debt shouldn't be held against them. They also claim medical debt is more prone to inaccuracies due to billing mistakes by health providers and insurers. The three main credit bureaus (TransUnion, Equifax, and Experian) stopped reporting medical debt under $500 in 2023. But most people with medical debt owe significantly more. Studies show that nearly half of all Americans carry some type of medical debt; this figure rises to over half for low-income residents, according to the California Health Care Foundation. A key point is that patients can only benefit from this law if the debt is owed directly to a medical provider or collection agency, not when it's charged on a medical credit card or general credit card. This new law follows similar ones enacted in several other states, including New York and Colorado
Medical Debt Credit Score Law Healthcare Costs Financial Burden
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