What Is Medical Debt?
Medical debt is money owed for any type of medical service or product. The money may be owed directly to the provider of the service or to an agent of the provider, such as a collection agency. When money is borrowed for the purpose of paying off medical bills, it is also considered medical debt.
How Does Medical Debt Relate To Asset Building?
A trip to the doctor or hospital can result in out-of-pocket medical expenses. For millions of American families, these expenses outstrip their available cash reserves. In fact, 49 million (28 percent) American adults under the age of 65 have medical debt or bills that they are paying off over time.
Tens of millions of Americans with medical bill problems or medical debt use up all of their savings to pay the bills and millions more take on credit card debt trying to pay their medical bills. Nearly 30 million Americans annually are contacted by collection agencies for unpaid medical bills.
Unaffordable medical expenses result in outstanding medical bills. This medical debt can be a barrier to health care. Unfortunately, it also creates problems for families striving to develop savings or access affordable credit.
Why Participate in the Medical Debt Training?
As the staff of a nonprofit organization working on family economic success, it is important for you know whether medical debt factors into the lives of your clients. After taking these trainings, you will be able to
Legislation has been introduced into the U.S. House (in June 2011) to require that paid or settled medical debt up to $2,500 be excluded or removed from credit reports. Read the Medical Debt Responsibility Act of 2011 and the Dear Colleague letter from the bill’s original sponsors to their fellow House members.
Also see Mark Rukavina’s testimony before the Committee on Financial Services, Subcommittee on Financial Institutions and Consumer Credit about this issue. Mr. Rukavina is Executive Director of The Access Project, an AssetPlatform.org partner.