Medical Bills Upended Her Life and Her Credit Score

This story is part of an ongoing investigation from KHN and NPR into medical debt.  

KAISER HEALTH NEWS – Penelope Wingard is tough. She has survived breast cancer, a brain aneurysm, and surgery on both eyes. But saving her life has come at a steep cost.

Wingard — who goes by “Penny” — is now free from cancer. But for the past eight years, she has been battling something that has felt just as tough as a chronic illness: medical debt. Symptoms include daily bills in the mail and harassing calls from collectors. And her credit score has taken a hit.

She has resigned herself to living with the ramifications of medical debt.

Those include being cut off from doctors until she pays down her debt, having to borrow money from family for medical emergencies, and being rejected from jobs when her low credit score shows up as a red flag on background checks.

“It’s like you’re being punished for being sick,” Wingard said.

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This year, three national credit agencies announced new policies to prevent medical debt from harming people’s credit scores. Consumer advocates celebrated, thinking relief was finally on the way for millions of Americans struggling with medical bills.

It turns out the new policies won’t help Wingard.

A report from the Consumer Financial Protection Bureau found the policies won’t reach many of the people hit hardest by medical debt. Like Wingard, they tend to be Black Americans living in Southern states that have not expanded Medicaid.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

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Your medical debt could soon be excluded from your credit report, say top credit bureaus

Equifax, Experian and TransUnion said nearly 70 percent of medical collection debt will no longer show up on people’s credit reports

Perspective by Michelle Singletary. Columnist | March 18, 2022 

THE WASHINGTON POST – Starting in the first half of 2023, Equifax, Experian, and TransUnion will no longer include medical collection debt under at least $500 on credit reports. (Caleb Jones/AP)

The three major credit bureaus said nearly 70 percent of paid medical debt, which can drag down people’s credit scores, will be removed from consumer credit reports by July 1.

Additionally, the bureaus — Equifax, Experian and TransUnion — said they would extend the time period before unpaid medical collection debt would be reported on a consumer’s credit file to one year, up from six months. The additional time can give people an opportunity to work with their health-care provider to settle any dispute or work out a payment plan before the debt is included on their credit report.

Starting in the first half of 2023, the bureaus will no longer include medical collection debt under at least $500 on credit reports.

The bureaus said this action comes after “months of industry research.”

“As an industry, we remain committed to helping drive fair and affordable access to credit for all consumers,” the chief executives of the bureaus said in a joint statement.

But the decision follows a major report from the Consumer Financial Protection Bureau (CFPB) that indicated the agency was seriously looking into regulatory rules to exclude such debt from credit reports.

Federal watchdog questions whether credit reports should include medical debt

CFPB Director Rohit Chopra has been extremely critical of how medical debt is reported to the credit bureaus and thus factored into credit scores, which are used to determine creditworthiness for loans, apartments or insurance.

As of the second quarter of 2021, 58 percent of bills in collections were medical bills, according to the CFPB. The CFPB’s research also showed $88 billion in medical debt on consumer credit records as of June 2021.

“This action shows that a strong CFPB with a strong director can make transformational change for the lives of everyday consumers,” said Jenifer Bosco, staff attorney at the National Consumer Law Center (NCLC). “The change will help most of the 15 percent of Americans with medical debt on their credit report.”


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