Medical debt dragging down credit scores of millions of Americans

Over 43 millions Americans have their credit scores affected by medical debt.

A new report released last week by the Consumer Financial Protection Bureau found that millions of Americans continue to struggle with issues related to medical debt, despite expansive federal efforts to bring costs under control. The report found that more than 43 million Americans currently have their medical debt responsibilities negatively weighing on their credit score. 

The report concluded that at many facilities, the process of billing for care can be confusing and prone to error. The system in place for reporting medical debt was also called "haphazard," as it often fails to notify patients of their existing debt. 

"It's hard for consumers to navigate the medical debt maze and come out with a clean credit report on the other side," said Consumer Financial Protection Bureau director Richard Cordray in a statement. "Getting medical care should not make your credit report sick."

Today, almost half of all overdue debt on credit reports is due to unpaid medical expenses. It is also worth noting that many of these consumers are otherwise in solid financial standing. For 15 million people, nearly a third of total debtors included in the report, medical debt is the only debt they have in collections in their credit report.

Poor credit caused by medical debt can affect a consumers ability to make important purchases the drive the economy, such as cars and homes. Concerns over existing debt can also cause patients to avoid seeking additional care, causing their symptoms to compound and leading to more expensive treatment in the future. 

To help protect against bad debt caused by patients being unprepared for the cost of their care, accounts receivable management professionals are encouraged to pursue accounts receivable outsourcing