8 ms·

The consequences are not the same as a credit card. Medical debt in the US does not show up like credit card debt and does not have bearing on your credit score

by devin 3y ago

The consequences are not the same as a credit card. Medical debt in the US does not show up like credit card debt and does not have bearing on your credit score. People with massive medical debt can arrange with the health system to pay $50 per month on a $50,000 medical bill, and it has no material impact on their credit.

adamc 3y ago
I didn't know that. I have to say, this is a crazy system. Why not just have a single payer rather than saddle people with debts that they cannot (and will not) pay off? It's got to cause a lot of stress.
- rjbwork 3y ago
  Because then insurance companies wouldn't be able to skim ~20% off the top of the system. A lot of people who own stock in those insurance companies would be very upset.
- School-Cotton 3y ago
  > Why not just The US can't "just" do anything because the political system is completely deadlocked. It's not really like well-functioning democracies where a coalition can win an election with a particular set of proposals for reform and then get those implemented.
  - adamc 3y ago
    Yeah, but this pre-dates that gridlock. Not disagreeing. Actually, the Republican party these days is capable of gridlocking itself. I've never seen such a high level of dysfunction -- enough so that I suspect we are living in some transition period, although what we are transitioning to I am uncertain. I don't think the current Republican party is stable.
    - paulmd 3y ago
      transition need only happen when there is some potential consequence of failure. The US is militarily inassailable, it's not going to fall in the same way that, eg, the polish sejm did with the liberum veto. sure, it can crumble economically etc but that's a lot slower process and gives plenty of time to materialize the spin.
- notaustinpowers 3y ago
  Because America is hyper-individualistic and distrusting of government. We don't trust the government to manage it appropriately and will instead use that money for vanity projects or to line the pockets of whoever is running that program. Then for the people, we consider "failures" such as debt, homelessness, etc as moral failures, rather than failures of the system. The leading thought is "Why are MY tax dollars paying for someone else's knee surgery? They should have planned properly!" Any change to this system will require a societal shift within America which isn't going to be happening anytime soon, if ever.
  - TimedToasts 3y ago
    > "Why are MY tax dollars paying for someone else's knee surgery? They should have planned properly!" This is a very bad faith take on what groups opposed are saying and I don't even agree with them. You don't need to do this to effectively argue against this stance.
    - HumblyTossed 3y ago
      It's really not. Plenty of people feel this way.
    - silverquiet 3y ago
      > Even on death’s doorstep, Trevor was not angry. In fact, he staunchly supported the stance promoted by his elected officials. “Ain’t no way I would ever support Obamacare or sign up for it,” he told me. “I would rather die.” When I asked him why he felt this way even as he faced severe illness, he explained: “We don’t need any more government in our lives. And in any case, no way I want my tax dollars paying for Mexicans or welfare queens.” [0] [0]https://www.bostonreview.net/articles/jonathan-m-metzl-dying-whiteness/ https://www.bostonreview.net/articles/jonathan-m-metzl-dying...
      - ryandrake 3y ago
        It is super-sad, yet quintessentially USA: literally dying, for a political class who don't care about you, over principles rooted in selfishness. Can you get any more American than that?
- HumblyTossed 3y ago
  > Why not just have a single payer rather than saddle people with debts that they cannot (and will not) pay off? It's got to cause a lot of stress. Because a job "with benefits" is a badge of honor. Because the "gubment" is wasteful. Because people believe people will scam any system like that (although most people who think this assume it's "certain" people who do the scamming and can't be bothered to realize it's people like Rick Scott who do the scamming.).
nullindividual 3y ago
> US does not show up like credit card debt and does not have bearing on your credit score Did the rule change that it can no longer show up regardless of timeframe on a credit score? I believe in the US it used to be 1 year after being overdue. Anyhow, given that it now no longer shows up, what's the point of paying it?
- devin 3y ago
  Ah, I did not know that. I only knew that you could arrange to pay a tiny amount and thus prevent yourself from ever becoming "overdue".
standeven 3y ago
Non-American here: What is the incentive for anyone in the US to pay off medical debt then? Also, I’ve read that medical debt is the number one cause of personal bankruptcy in the US; how does that work?
- JumpCrisscross 3y ago
  > What is the incentive for anyone in the US to pay off medical debt then? The non-reportability is a recent change. Also, if the provider sues, whether it’s on your credit report is irrelevant.
  - DonnyV 3y ago
    The non-reporting is only for cleared medical debt, which means it was paid off. Also it has to be under $500. Which we all know in the US. There is no medical bill under $500. This thing that Biden Admin did is useless for people that have medical debt. https://www.cnbc.com/select/medical-debt-credit-report/ https://www.cnbc.com/select/medical-debt-credit-report/
    - JumpCrisscross 3y ago
      > is useless for people that have medical debt Strongly disagree. Being able to take your time to pay a debt when in a cash crunch without worrying about the long-term impacts on your credit is material.
      - DonnyV 3y ago
        This doesn't solve the actual problem though. These private insurance companies need to GO!! #MedicareForAll
- rohansingh 3y ago
  First off, it's not strictly true that medical debt won't show up on a consumer credit report. Medical debts that are in collections will eventually show up, if they are large enough. Secondly, it's still a legal debt. That means the billing department will employ escalating collection tactics for large debts where they believe the debtor has sufficient assets.
jacobsimon 3y ago
I don’t think this is true - it says in the article that debts of less than $500 will not show up on credit reports. It sounds like it would only show up if it went to collections though as most hospitals don’t report directly.
HumblyTossed 3y ago
Pretty sure UVA ( University of Virginia Health System ) stands out as a contrasting point to that. I've read they are extremely aggressive at going after people.

by devin 3y ago

adamc 3y ago

I didn't know that. I have to say, this is a crazy system. Why not just have a single payer rather than saddle people with debts that they cannot (and will not) pay off? It's got to cause a lot of stress.

rjbwork 3y ago
Because then insurance companies wouldn't be able to skim ~20% off the top of the system. A lot of people who own stock in those insurance companies would be very upset.
School-Cotton 3y ago
> Why not just The US can't "just" do anything because the political system is completely deadlocked. It's not really like well-functioning democracies where a coalition can win an election with a particular set of proposals for reform and then get those implemented.
- adamc 3y ago
  Yeah, but this pre-dates that gridlock. Not disagreeing. Actually, the Republican party these days is capable of gridlocking itself. I've never seen such a high level of dysfunction -- enough so that I suspect we are living in some transition period, although what we are transitioning to I am uncertain. I don't think the current Republican party is stable.
  - paulmd 3y ago
    transition need only happen when there is some potential consequence of failure. The US is militarily inassailable, it's not going to fall in the same way that, eg, the polish sejm did with the liberum veto. sure, it can crumble economically etc but that's a lot slower process and gives plenty of time to materialize the spin.
notaustinpowers 3y ago
Because America is hyper-individualistic and distrusting of government. We don't trust the government to manage it appropriately and will instead use that money for vanity projects or to line the pockets of whoever is running that program. Then for the people, we consider "failures" such as debt, homelessness, etc as moral failures, rather than failures of the system. The leading thought is "Why are MY tax dollars paying for someone else's knee surgery? They should have planned properly!" Any change to this system will require a societal shift within America which isn't going to be happening anytime soon, if ever.
- TimedToasts 3y ago
  > "Why are MY tax dollars paying for someone else's knee surgery? They should have planned properly!" This is a very bad faith take on what groups opposed are saying and I don't even agree with them. You don't need to do this to effectively argue against this stance.
  - HumblyTossed 3y ago
    It's really not. Plenty of people feel this way.
  - silverquiet 3y ago
    > Even on death’s doorstep, Trevor was not angry. In fact, he staunchly supported the stance promoted by his elected officials. “Ain’t no way I would ever support Obamacare or sign up for it,” he told me. “I would rather die.” When I asked him why he felt this way even as he faced severe illness, he explained: “We don’t need any more government in our lives. And in any case, no way I want my tax dollars paying for Mexicans or welfare queens.” [0] [0]https://www.bostonreview.net/articles/jonathan-m-metzl-dying-whiteness/ https://www.bostonreview.net/articles/jonathan-m-metzl-dying...
    - ryandrake 3y ago
      It is super-sad, yet quintessentially USA: literally dying, for a political class who don't care about you, over principles rooted in selfishness. Can you get any more American than that?
HumblyTossed 3y ago
> Why not just have a single payer rather than saddle people with debts that they cannot (and will not) pay off? It's got to cause a lot of stress. Because a job "with benefits" is a badge of honor. Because the "gubment" is wasteful. Because people believe people will scam any system like that (although most people who think this assume it's "certain" people who do the scamming and can't be bothered to realize it's people like Rick Scott who do the scamming.).

nullindividual 3y ago

> US does not show up like credit card debt and does not have bearing on your credit score Did the rule change that it can no longer show up regardless of timeframe on a credit score? I believe in the US it used to be 1 year after being overdue. Anyhow, given that it now no longer shows up, what's the point of paying it?

devin 3y ago
Ah, I did not know that. I only knew that you could arrange to pay a tiny amount and thus prevent yourself from ever becoming "overdue".

standeven 3y ago

Non-American here: What is the incentive for anyone in the US to pay off medical debt then? Also, I’ve read that medical debt is the number one cause of personal bankruptcy in the US; how does that work?

JumpCrisscross 3y ago
> What is the incentive for anyone in the US to pay off medical debt then? The non-reportability is a recent change. Also, if the provider sues, whether it’s on your credit report is irrelevant.
- DonnyV 3y ago
  The non-reporting is only for cleared medical debt, which means it was paid off. Also it has to be under $500. Which we all know in the US. There is no medical bill under $500. This thing that Biden Admin did is useless for people that have medical debt. https://www.cnbc.com/select/medical-debt-credit-report/ https://www.cnbc.com/select/medical-debt-credit-report/
  - JumpCrisscross 3y ago
    > is useless for people that have medical debt Strongly disagree. Being able to take your time to pay a debt when in a cash crunch without worrying about the long-term impacts on your credit is material.
    - DonnyV 3y ago
      This doesn't solve the actual problem though. These private insurance companies need to GO!! #MedicareForAll
rohansingh 3y ago
First off, it's not strictly true that medical debt won't show up on a consumer credit report. Medical debts that are in collections will eventually show up, if they are large enough. Secondly, it's still a legal debt. That means the billing department will employ escalating collection tactics for large debts where they believe the debtor has sufficient assets.

jacobsimon 3y ago

I don’t think this is true - it says in the article that debts of less than $500 will not show up on credit reports. It sounds like it would only show up if it went to collections though as most hospitals don’t report directly.

HumblyTossed 3y ago

Pretty sure UVA ( University of Virginia Health System ) stands out as a contrasting point to that. I've read they are extremely aggressive at going after people.