Recently, we got a bill from a doctor we haven’t seen in over a year. Luckily, the very plain envelope it came in didn’t get tossed into the junk mail pile, but after that experience, we can tell you from first hand experience how easy it is to miss a medical bill, and have a bill go to collections.
Well, if you’ve ever missed a medical bill, you’re definitely not the only one, and it’s looking like a growing problem that may be affecting the entire U.S. economy:
Are medical bill collection accounts buried away inside millions of consumers’ credit files — even bills that were fully paid or settled years ago — functioning as a drag on the housing market?
That sounds farfetched, yet some credit and mortgage industry experts say negative medical collection records are playing a little-recognized but significant role in depressing otherwise creditworthy loan applicants’ scores. Lower scores, in turn, are disqualifying borrowers from getting mortgages in today’s toughened underwriting climate or forcing them to pay higher interest rates, fees and down payments.
According to a 2008 study by the nonprofit Commonwealth Fund, an estimated 28 million Americans were contacted by collection agencies on medical debt issues during a two-year period and 72 million reported difficulties in paying outstanding medical bills.
Now a bipartisan group in Congress is sponsoring legislation that would limit the credit score effects of paid-off and settled collection accounts that sometimes are the product of disputes and botched record-keeping by insurance companies, hospitals and doctors.
Do you think medical bills are affecting the U.S. economy? Tell us about it!
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