NEW YORK (Credit.com) — These days, many consumers may go to the hospital or a doctor’s office and get care but not know their treatments carry with them bills that aren’t covered by insurance or other health plans. This lack of knowledge can end up costing them dearly.
Some estimates show that as many as 40% of consumers have some sort of medical debt listed on their credit reports, and often without the borrower’s knowledge, according to a report from The Columbus Dispatch. Those debts may go unpaid for months or more and end up being sent to collections, where their delinquency can haunt consumers for years.
A study by the Commonwealth Fund, an organization dedicated to improving health care systems, found that in 2010 as many as 30 million people across the country got calls from collections agencies related to unpaid medical bills. That was up from 22 million in 2005 – an increase of 36% in just five years. Further, a study by the Federal Reserve Board in 2003 found that while about 31% of all consumers’ credit reports had debts in collections listed on them, about half were the result of outstanding medical bills.
Worse is that many consumers don’t know about these obligations until the bill has already been handed off to a collections agency, at which point they may have far less recourse for dealing with the accounts, the report said. Fortunately for these borrowers, federal lawmakers are exploring options for trouble consumers who are dealing with medical debt.