Your medical bills can start stacking up fast, the moment you develop or suffer from a serious illness or injury. Sooner rather than later you could find yourself battling out a dozen of collection calls with vice voices chiding you to pay off your piles of medical debt.
There are two different studies to support such a financially depreciating trend in our country.
A study by the federal consumer watchdog CFPB has revealed that medical debt severely batters consumer credit scores. According to their study, consumers having their medical debts in collections might get booed off by some credit scoring models as far as their creditworthiness is concerned. Moreover, the same credit scoring model may never be that forgiving even to those who've took the trouble of paying off their outstanding medical bills and yet be deprived of a possible reward in terms of an improve credit rating by the same.
Basically, a dominant force is instrumental here in evaluating the creditworthiness of the consumers and such a dominance over the present day credit scoring models is wreaking havoc on the lives of the individuals as well as on their families, particularly those who are at loggerheads with some kind of a serious medical condition. In short, they are in extreme health crisis that gets all the more aggravated due to financial ones cropping up to cause collateral damage.
As a result, a number of pro-consumer advocacy groups are up in arms to rid the the so-called affordable health care system of its inherent anomalies and misgivings. One-of-its-kind group has asked the Congress to make the long-awaited bill better known as Medical Debt Responsibility Act into law. As per the original statutes included in to this Act, consumer reporting agencies (CRA) will have to drop any type of negative tradeline or information that directly relates to either fully paid or settled medical debt from a consumer's credit report within 45 days.
While people are busy demanding better legislations to help the authorities better monitor the activities of the credit reporting agencies, there is a bona fide CRA that is working in favor of the financially distraught American families, popularly called as the Fair Isaac - the developer of the FICO credit scoring model.
In the recent past, the company has declared that it wouldn't take into account any sort of paid or settled debt in collections while calculating the credit score of the people. Moreover, they have also announced that from now onwards they'll put less importance on any amount of outstanding medical debt in collections, as was the norm in the past.
Sadly, there are still some lenders and CRAs that continue to use their old credit scoring model to evaluate their potential customer's credit worthiness. This implies that a lot of people would continue to suffer under the old credit evaluation system and left to lurch without enjoying any benefit out of these latest improvements.
Even though there is a silver lining in the cloud, yet the much-awaited medical debt bill is a solution that has become all the more important for the people today. This is because it could defend everyone's interest and protect all existing as well as past medical debtors from being mistreated for their paid or settled medical debt by their employers, insurers and prospective creditors.
A survey was conducted by the Princeton Survey Research Associates International on behalf of Bankrate.com, a leading personal finance website in the country. The researchers spoke to around 1,006 American adults over landline and cell phone in both English as well as Spanish for a period of four days, starting from 21st August to 24th August 2014. The error margin is expected to be more or less 3.6 percentage points.
Results from the survey showed that more than half of the country's population consider themselves to be financially insecure as far as paying for the health care costs are concerned. Around 44 percent of the people interviewed with per annum income being less than $33,000 confessed to having more medical debt than emergency savings.
There are hundreds and even thousands of others who find themselves in a tight situation when asked to pay off their medical bills. Surprisingly, many consumers are still ignorant about Obamacare or the Affordable Care Act (ACA), while there are 55 percent of them who believe that they won't ever qualify for the ACA in the future.
So, what should you do to avert a similar fate like others with medical debt in your life? Right now you should voice your concern over escalating medical costs in the country and support the cause of making Medical Debt Responsibility Act, a federal law. It is you who can tell the local legislators representing you both in the House and the Senate to pass the bill and help others who back the same cause to keep up the pressure on the Congress by letting them know about your own medical debt story.