A new bill intended to prevent medical debt from appearing on credit scores may, in fact, be dead. The Medical Debt Responsibility Act was intended to require credit score reporting companies to remove any medical debt from credit reports within 45 days of being resolved. However, for three consecutive years the bill has failed to be passed, and, if indications are true, it may fail again this year.
Millions of people in Michigan, and throughout the United States, suffer from credit scores that were destroyed due to outstanding medical debt. According to one senator in favor of the bill, medical debt is different from other kinds of debt. Not only is it unplanned and unexpected, but in many cases there is absolutely nothing that financially responsible people can do to prevent it. Further, people can quickly find themselves tens of thousands of dollars underwater in a matter of days.
With the Patient Protection and Affordable Care Act, the problem of medical debt may be changing. Soon, out-of-pocket medical costs will be capped at $6,350 for single individuals and $12,700 for families. Also, no one, no matter what kind of pre-existing conditions they happen to have, will be denied medical insurance. As such, because medical insurance will be so easy to obtain, those individuals who do have outstanding medical debt are likely to be considered a credit risk to lenders.
Under the Medical Debt Responsibility Act, Michigan residents who do not have medical insurance may be viewed as people who are financially irresponsible, and lenders may shy away from giving them loans and/or see them as a potential credit risk. This is more reason to pay down one's medial debt and resolve it immediately. Fortunately, there are numerous legal strategies that can be employed on behalf of individuals with large, outstanding medical bills to help them eradicate that debt, get it paid, and get it behind them once and for all.
Source: Forbes, Good Riddance To Bill Eliminating Medical Debt From Credit Scores, Evan Albright, Oct. 17, 2013