Medical debt law: Help is limited

“CHARLOTTE, N.C. — After a year of chemo and radiation, doctors told Penelope ‘Penny’ Wingard in 2014 that her breast cancer was in remission,” Aneri Pattani writes over at Kaiser Health News. “She’d been praying for this good news. But it also meant she no longer qualified for a program in her state that offers temporary Medicaid coverage to patients undergoing active breast cancer treatment. Wingard became uninsured. She’d survived the medical toll, but the financial toll was ongoing. Bills for follow-up appointments, blood tests, and scans quickly piled up. Soon, her oncologist said he wouldn’t see her until she paid down the debt. ‘My hair hadn’t even grown back from chemo,’ Wingard said, ‘and I couldn’t see my oncologist.’ Medical debt has sunk her credit score so low that she has struggled to qualify for loans, and applying for jobs and apartments has become a harrowing experience. ‘It’s like you’re being punished for being sick,’ Wingard said. Earlier this year, when three national credit agencies announced new policies to deal with medical debt, consumer advocates celebrated, thinking it’d provide relief for patients like Wingard. But it turns out the changes aren’t enough to help her or many other Black and low-income patients, who are often the ones hit hardest by medical debt. Under the new policies, Equifax, Experian, and TransUnion will remove from credit reports any paid debts or those that were less than $500, even if unpaid. This doesn’t wipe out what people owe, but the idea is to remove the black mark of collections from their credit so they can more easily reach milestones like qualifying for a car or home loan. The changes, which go into full effect in 2023, are expected to benefit an estimated 16 million Americans. But a federal report released this summer suggests those may not be the ones who need it most. ‘Although the credit reporting companies have trumpeted this as a big change, the fact is they’re just removing the small stuff,’ said Ryan Sandler, a co-author of the report and senior economist with the Consumer Financial Protection Bureau. … People burdened most by medical debt tend to be Black or Hispanic, low-income, and in the South. A nationwide KFF poll found 56% of Black and 50% of Hispanic adults say they have current debt due to medical or dental bills, compared with 37% of non-Hispanic white adults. And a study published in 2021 found medical debt was highest within low-income communities and in Southern states that had not expanded Medicaid. But, Sandler said, ‘the population that is going to have all their collections removed is a little more likely to live in majority-white neighborhoods and high-income neighborhoods.'” Aneri Pattani, “Medical Debt Sunk Her Credit. New Changes From the Credit Reporting Agencies Won’t Help,” Kaiser Health News.