Credit reporting agencies say a debt is a debt, and a medical debt needs to be treated as seriously as a mortgage or credit card debt issue.
The four senators don’t see it that way. This from the letter:
“The issue of consumer debt is usually discussed in relation to a consumer’s ability to pay … But for medical debt, the problem is one of information. Consumers frequently do not even know there is a debt that they are personally responsible for paying before it goes to collections. Often, by the time they find out, the medical office has already reported the bill to collections. In this case, even if the consumer is still in discussions with the insurance company, the damage to the consumer’s credit score has already been done.”
“We therefore ask you to begin the process of addressing, through your authorities and in cooperation with us, the problems related to medical debt collections and scoring.”
The group of senators has also co-sponsored a bill that would force credit scoring firms to lift medical debts from credit reports within 45 days of full payment received.
It’s not clear what the CFPB can do, if anything, to push credit scoring agencies to cut consumers a break on medical costs linked to lower credit scores.
At least the issue is seeing the light of day, and health care consumers who are sick of lousy credit scores may finally have a path to a cleaner bill of health – but only if they pay their medical bills.