Americans are often “forced” to pay medical bills they don’t owe, the feds say

It may come as no surprise that many Americans are besieged by medical bills, especially with regards to COVID-19 the pandemic advances. Perhaps more surprising is that this is often for debts they have already paid or don’t actually have.

In a new report, the Consumer Financial Protection Office found that people’s most common debt collection complaints last year had to do with efforts to collect an account they said didn’t belong to them.

“In health care debt collection complaints, this problem makes up nearly half of the complaints and, importantly, the volume of complaints on this topic is increasing,” the federal agency said, noting that such bills often end up in reports. people’s credit and force them to a bureaucratic hamster wheel to erase their financial records.

Between 2018 and 2021, public complaints about attempts to collect medical bills for consumers said they were not in debt with a 31% increase, the CFPB found. According to federal data, about 1 in 5 households in the United States have health care-related debt. Medical bills are the most commonly reported item on consumer credit reports, according to regulators.

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“People also report learning of a pending medical bill only after experiencing a drop in their credit score and being notified that just paying the bill would remove negative cash information from their credit report,” he added. the CFPB.

750,000 complaints

The CFPB said it sent more than 750,000 complaints to around 3,400 companies in 2021 for them to review. Among the other achievements of the agency:

  • The average medical debt in the United States is $ 310.
  • In 2021, 15% of debt recovery complaints related to attempts to collect a medical bill.
  • Consumers who receive collection notices for a medical bill often report that they are unfamiliar with the listed provider.
  • Consumers also report that take-back notices often contain large amounts of personal medical information.
  • Many Americans claim to pay their medical bills to avoid negative financial and privacy consequences, even if they believe the debt is invalid.
  • Communities with multiple minorities or low-income individuals, veterans, and young adults are more likely to see medical bills on their credit reports.

“Many Americans feel compelled to pay medical bills they have already paid or never owed,” CFPB director Rohit Chopra said in a statement. “The credit reporting system shouldn’t be used as a weapon to force patients to pay medical bills they don’t owe.”

In March, major credit rating firms Equifax, Experian, and TransUnion said they planned to eliminate most of the medical debt from consumer credit reports starting this summer.

Congress last year tried to address the issue of medical bills on the slopes by passing the “No Surprises Act”, which protects people with health insurance from being billed to receive emergency medical care outside of an insurer’s network.

Under the law, patients are still liable for any deductibles and copays they would normally have to pay under their plan, but they can only be billed at their plan’s online rate.

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