NEW YORK (5/15/12)--Figuring what you owe on a medical bill can be confusing at best. You wait for your insurance provider's explanation of benefits, wait for the bill, and try to figure out what part--if any--is your responsibility. The wait can be months, and by that time the "unpaid" bill may already have tarnished your credit score (NYTimes.com
Even consumers with good insurance coverage can have trouble figuring out what they owe after a visit to a doctor's office or emergency room--which can generate multiple bills. And as consumers become responsible for more medical-associated costs, billing gets more complex. In 2010 alone, collection agencies contacted 30 million individuals because of unpaid medical bills, according to the Commonwealth Fund, a nonprofit research group.
People often don't realize their credit has been stained until they want to obtain or refinance a mortgage. A scarred score can mean having to pay big bucks--often thousands of dollars more than someone with good credit would pay--in a higher interest rate. People with formerly spotless credit histories could see their scores drop by 100 points or more if unpaid medical bills show up on their reports.
Avoid medical bill missteps by keeping a close eye on your credit report and being proactive in credit matters, suggests PrivacyMatters.com:
Don't ignore paying a medical bill--Even if it's for a small amount, ignoring a bill can tarnish your credit score. If you have questions about what you're responsible for, contact your insurance provider.
Be an informed patient--Request copies of relevant paperwork from your medical provider and insurance company. Pay all bills that you're responsible for on time.
Consider getting help from a financial adviser--The professionals at your credit union can look at your spending plan and help set up a long-term strategy to help you pay off medical debt.
Stay on top of your credit report--Only one website has been officially authorized to provide credit reports: AnnualCreditReport.com. You also can call 877-322-8228, or complete a request form and mail it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. Order your credit report for free up to three times a year; stagger the reports from the three primary providers every four months in rotation so you can keep tabs throughout the year.
For more information about staying on top of your credit report, read "Accurate Credit Report Does You Good" in the Home & Family Finance Resource Center