Elizabeth Rosenthal’s NY Times piece, “When Health Costs Harm Your Credit,” examines that moment when you open envelopes containing medical bills from hospitals, clinics, and insurers, not quite knowing what to make of them.
“I sigh or swear,” Rosenthal writes. “And set them aside for when I have time to clarify the confusion: An out-of-network charge from a doctor I know is in-network? An un-itemized laboratory bill from a doctor I’ve never heard of? A bill for a huge charge before my insurer has paid its yet unknown portion of a hospital’s unknowable fee?”
We usually pay bills for other services quickly, as Rosenthal points out, like the bills we get for our mobile phones. After all, those bills are simple. You know what your mortgage payment is. You know what your car payment is. You know what you’re paying for your mobile phone service.
But we don’t know what we’re paying for health care treatment (are these un-itemized bills purposely un-itemized?) which, in turn, means that we often don’t pay our medical bills right away.
And if we don’t pay our medical bills right away, the trouble is that the credit agencies can be notified of past due bills quickly – apparently in the few weeks or months of time that a medical bill goes unpaid – which may damage your credit rating.
Rosenthal goes on to describe a number of specific situations where patients get health care treatment and end up with huge bills that must be negotiated. But during the negotiations, some of the bills get sent to bill collectors, and once that happens, it’s a stone’s throw from damaging your creditworthiness.
The moral of the story is be sure to protect yourself during negotiations.