Home Consumer debt Tens of millions of households face medical debt; relief is coming – Action News Jax

Tens of millions of households face medical debt; relief is coming – Action News Jax


WASHINGTON — Louise Trice’s 90th birthday was a bright spot in the shadow of the pandemic in August 2020.

“It was the best day of my life,” said Robyn King, Trice’s daughter. “It was a deluge of drivers passing. It was a nice day.”

Friends and family wished a socially distant birthday and sang songs, while Trice was adorned with a birthday sash and full of smiles. Trice was then living in a nursing home in Ohio and was being treated for Alzheimer’s disease.

These are memories that King cherishes very much today. A few months later, in October 2020, her mother passed away. To make matters more difficult, days before Trice died, King discovered she was stuck with a bill for around $80,000 from her mother’s nursing home.

“The idea of ​​them trying to get $80,000 from me was like it wouldn’t happen. Not in this lifetime,” King said.

King said it turned out that her mother’s Medicaid nursing coverage had expired without her family’s knowledge. King says she filed the proper paperwork, including paperwork stating she would not be financially responsible.

“I got a letter in the mail where I was being sued,” King said. “They let things go on for months before bringing it to my attention that this is where we were and I was like fine why didn’t you say something sooner?”

The king said the Cleveland Legal Aid Society helped resolve the complaint against her. But although she is no longer personally responsible for the bill, King said the nursing home is still pursuing her late mother’s assets.

King testified on Capitol Hill before members of Congress this year to share his story as a warning about the burden of medical debt. “There’s just no excuse for this in America,” King said during congressional testimony in March 2022.

The data shows that King is not alone.

A report from the Consumer Financial Protection Bureau (CFPB) shows that there was approximately $88 billion in medical debt on Americans’ credit reports last year.

And that number could probably be higher, because some medical debts don’t show up as medical debts, depending on how the consumer paid for the cost.

“A lot of people find themselves in a situation where they either have to take out other loans, borrow money from friends and family, or put medical debt on credit cards,” said Jenifer Bosco, an attorney. of the National Consumer Law Center.

According to the CFPB report, approximately 20% of US households report having medical debt.

The National Consumer Law Center said some recent changes will significantly help consumers.

Starting this summer, the three major credit bureaus announced that they would no longer include medical debt in credit reports once it was paid off.

Also, starting in 2023, companies will only report medical debts of at least $500.

The move could remove nearly 70% of medical debt recoveries from credit reports.

But consumer advocates warn that the actions of the credit bureaus are only voluntary at this time and that there are still millions of people with medical debt under $500.

“We’d like to see these made permanent and enforceable as well so we can reach the remaining people who have medical debt, because a lot of those people are going to have catastrophic medical debt,” Bosco said.

King hopes lawmakers will do more to require better notification to families of loved ones’ medical bills.

“I really think more safeguards need to be put in place,” King said. “This is the land of the free and the home of the brave and yet we have people who are penalized for being sick or penalized for taking care of a loved one.”