From 1999 to 2009, premium costs for family insurance have risen by one hundred and thirty one percent. That\’s easily over three times the rate at which wages rose during this time. In the recession, millions of jobs have been lost, putting workers who have just lost their jobs at risk of additionally living without health insurance. For those who continue to be employed, employers are pushing more of the costs of health insurance onto their workers as they struggle with economic uncertainty. Also, there are blue collar and retail workers, waitresses and the like who are paid less, work harder and are not offered health insurance plans at their jobs. No wonder that Americans are struggling to pay their medical bills.
In 2007, about seventy two million Americans struggled with medical bills. A large portion of these people made paying off their medical bills a priority, while they had to struggle to pay for basic necessities like food, rent or heat. More than THIRTY MILLION American adults used up ALL of their savings or BORROWED AGAINST THEIR HOMES in order to pay off medical bills. Unfortunately, in this time of economic hardship, many Americans could not stop the bill collector from knocking on their door.
Thirty million Americans are contacted every year by collection agencies for delinquent medical bills; many struggle to pay these. Many people are unclear as to why their insurance refused to pay a claim, others are confused about the amount they owe. Over half of people who were surveyed said that they were puzzled by the medical jargon on their bills, and one in four said confusion led them to allow bills to go past the due date or to be sent to a collection agency.
A medical bill that is being sent to collections will typically be reported to credit bureaus. Unpaid debts will results in a lower credit score. Medical accounts, even those that have been fully paid off will remain on a credit report for up to seven years. This will result in lower credit scores and increases the costs of mortgages, car loans, or credit card interest.
Luckily, Ohio Congresswoman Kilroy understood the ramifications of unpaid medical bills. She decided to take action because she saw medical debt as something that was unique. She introduced The Medical Debt Relief Act, which states that medical debt that is fully paid off or settled must be removed from a consumer\’s credit report within thirty days.
Although this does not fix our botched healthcare system, it would provide relief for those who have paid off medical debt, while the rest of us wait for better health care reform.
Mallory Megan is employed by a debt collection agency. She also does articles on business and finance, consumer spending, and debt collection. Don\’t reprint this exact article. Instead, reprint a free unique content version of this same article.