43M U.S. Residents Have Medical Debt, Report Finds
About 42.9 million U.S. residents have outstanding medical debt, according to a Consumer Financial Protection Bureau report, AP/Modern Healthcare reports.
The report found that:
- An individual with overdue medical debt owes $1,766 on average;
- Medical expenses comprise more than half of debt on credit reports; and
- Half of consumers with debt from medical expenses showed no other signs of financial distress.
Notices From Different Billers Confuse Consumers
The report suggested that confusing billing notifications from hospitals and insurers could be one reason many U.S. residents have medical debt.
Specifically, the authors said that it often is difficult to tell from insurance and hospital statements how much is owed, the payment deadlines and which organization to pay.
CFPB Announces Changes To Address Confusion
Noting that consumers tend to dispute transactions when they are confused, CFPB on Thursday announced plans to require major consumer reporting agencies to report regularly about their methods for responding to and investigating disputed charges.
Some firms have already updated their credit score models to address the fallout from unpaid medical bills. For example, Fair Isaac in August lowered the weight it put in medical bills when predicting likelihood of repayment (AP/Modern Healthcare, 12/11).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.