It is certainly unfortunate that individuals and families get severely penalized for piling up medical debt due to circumstances which are out of their control. However, it would also be unfair if medical debt were simply discounted and did not impact consumers since that would result in many consumers foregoing payment of their medical bills altogether which would drive up insurance rates.
Perhaps what is needed is a separate rating score for medical bills which is accounted for differently or reviewed only upon a lender's business discretion.
A separate medical rating system might take into account the health care insurance plan available to a family or individual when the unfortunate medical catastrophe occurred and what steps are being taken to pay off the bills where no attempt to pay at all would be penalized and a significant effort compared to income and assets results in a better rating.
Another factor to examine is whether an individual or family has been living without insurance for many years despite a sufficient income. This would eliminate rewards for those utilizing medical care without insurance (and claiming indigence) a strategy which significantly increases medical premiums and taxpayer burdens.
Medical insurance reimbursement practices may also be contributing to this problem. It sometimes takes a month or two to get full reimbursement for a claim and in the meantime the bill may be unpaid. It is not often practical for consumers to pay the full amount of a medical bill prior to the insurance reimbursement and if this is impacting a consumer’s credit report then clearly this practice needs to be reviewed and changed.
Reform of healthcare needs to include strategies for consumers to maintain not only their health insurance but also their good name and credit history in the face of an unavoidable catastrophic medical emergency. Hopefully this administration can tackle this challenge along with healthcare reform.
