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Medical debt reform might not be helpful for South Carolina

Becoming sick, injured or otherwise unwell is an inevitability of life for many people in South Carolina. Although health insurance can help defray the high cost of seeking care, copays and payments from the insurance company usually fail to address the total bill. Indeed, many of the individuals who seek the help of a seasoned medical debt attorney are covered by health insurance, but still struggle with the final cost of their health care treatment. While various credit bureaus are reforming how they report medical debt, some of those who are truly in need of help will not be affected.

The reform stems from two different settlements that were reached with various state attorney generals back in 2015. The settlement was in response to the negative impact on patients' credit reports when payments lapsed between their insurance companies and their health care providers, and not when patients themselves failed to make payments. As of Sept. 15, 2017, credit bureaus will have to wait 180 days before they can place unpaid medical debts on credit reports. They will also be required to delete these reports if the debt is paid off.

While this reform makes great strides towards protecting patients, it still fails to address those who are forced into unimaginable debt for simply falling ill. A FICO analysis predicts that less than 0.1 percent of individuals who have credit reports will see a positive impact related to the 180-day waiting period. The waiting period also cannot protect medical providers from hiring collectors to seek repayment, which means that some patients could start receiving pestering phone calls as little as one day past a bill's due date.

Medical debt means more than just dealing with harassing creditors or an insurance company that refuses to pay. In South Carolina, some patients might even forgo further, necessary treatment simply to avoid taking on more debt. Others find that the negative impact of medical debt impairs their ability to find gainful employment or a safe place to live. Navigating the solutions to this type of problem can be difficult, but many patients find it helpful to discuss their options with an experienced medical debt attorney before taking action.

Source: nerdwallet.com, "Credit Bureaus Ease Medical Debt Pain for Only a Few", Liz Weston, Sept. 15, 2017

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