67 years old, Carl Gasper still is juggling a fair share
has a mortgage on his three-bedroom Green Tree, Pa.
home, car payments on his Chrysler 300 and several
credit cards with balances he carries from month to
he didnít know until recently is that he also has $640
in unpaid medical debt that had been turned over to a
collection agency and reported to the credit bureaus. He
found out the hard way in April when he tried to take
advantage of a zero percent interest credit card offer
ó to which he planned to transfer some other card
balancesó and got turned down.
medical debt had caused his credit rating to nosedive to
a score of 660, which disqualifies him from either being
approved by many creditors or from being offered the
best loan rates.
a shame that people like myself that are on a fixed
income suffer from a mistake made by people in the
medical field and the insurance field, and then be
turned over to a collection agency that mars your credit
without your knowledge," Gasper said.
people across the country find themselves in similar
medical debt could potentially wreck someoneís chances
of obtaining credit, the Washington, D.C.-based Consumer
Financial Protection Bureau recently released a study
indicating that many consumers do not even know they
have a medical debt in collections until they get a call
from a debt collector or discover the debt on a credit
overdue debt goes to collections and ends up on someoneís
credit report, it could damage that personís credit
score. A lower credit score means lenders likely will be
more cautious about lending money.
many ways, medical bills are unusual," Richard
Cordray, director of the CFPB, said in prepared remarks.
"When you take out a loan, typically you know how
much you will owe and the interest rate you will be
charged up front.
with medical costs, you have less visibility. Costs are
often unknown until after treatment."
Gasper, it began when he suffered a stroke at his home
on June 11, 2012, that sent him to Allegheny General
Hospital for a couple of days. Although his insurance
carrier at the time ó United Healthcare ó paid
$32,677 to the hospital, Gasper said the hospital mailed
him a room charge for $640, which he did not believe he
he was only kept at the hospital for observation after
being treated in the emergency room, he said he was
considered an outpatient. He said his carrier told him
that under his Medicare insurance plan he was only
liable for 20 percent of the $640 room charge, or $128.
thought he had settled the problem with Allegheny
General Hospital, but in September 2012 he began
receiving letters and phone calls from a collection
agency, Credit Management Co.
collection agency didnít listen to anything I had to
say," Gasper said. "They were constantly
billing me and calling me and harassing me twice a week
asking for $640."
refused to pay. The collection agency quit calling and
sending letters, but in February 2013, Credit Management
filed a claim with the credit bureaus.
Laurent, director of media relations at Allegheny
General Hospital, said although the hospital is limited
in what it can say due to patient confidentiality,
hospital representatives have confirmed with Gasperís
health plan that his bill is accurate. He said the
hospital also has no record of Gasper contacting the
hospital to dispute his bill.
with many, if not most health plans, this patient had
co-pay obligations that equaled the amount billed,"
Laurent said. "We understand the difficulties some
patients face in meeting their financial
responsibilities for care received.
assist such patients, we have policies and programs in
place to help ease that burden, including payment plans
and in the case of uninsured patients, steeply
discounted rates. Patients with insurance, however, are
expected to meet their full out-of-pocket financial
obligations as defined by their insurance policy."
said Allegheny General Hospital also allows patients who
have balances left to pay after insurance to apply for
charity care discounts.
downside of medical debt that ends up on credit reports
is that it often is difficult or impossible to remove
even after the debt is paid, according to John Ulzheimer,
president of consumer education for Mountain View,
Calif.-based CreditSesame.com, an online service that
provides free credit scores and credit monitoring.
our current scoring system, medical debt is just as
damaging as any other type of collections Ö defaulted
utilities, credit card bills or apartment leases,"
STORY CAN END HERE)
stays on your credit report seven years from the date
the original account with the doctor went into default.
if you pay it off, it wonít be removed," he said.
"It will only show a zero balance. The only way it
can be removed is if the credit report is inaccurate. In
the eyes of the collection agency, he owes $640.
Allegheny General Hospital acknowledges they messed up,
the collection would have been filed in error and could
potentially be removed," Ulzheimer said. "But
that argument would have to be taken up with the
proposed law called the Medical Debt Responsibility Act
would provide some measure of relief for people who pay
off delinquent medical debt.
it passes, the proposed piece of legislation would
require collection agencies to remove medical debt off a
personís credit report within 45 days of the debt
being paid or settled.
bill, sponsored by U.S. Rep. Maxine Waters, D-Calif.,
was introduced in April 2013. It was referred to the
House Committee on Financial Services and has been
sitting there ever since without action.
said the medical debt is costing him an opportunity to
refinance his other debt and has been damaging to his
personal finances. According to his Experian credit
report, which he provided to the Pittsburgh
Post-Gazette, the Allegheny General Hospital account is
scheduled to continue on his credit record until May
Iím paying 9.9 percent interest and Iíve got $5,000
debt, why wouldnít I transfer it to a zero percent
card for 18 months and pay the debt off probably in a
year instead of three years?" he asked. "And
at 67, how many years do I have? I donít have the kind
of money I used to have. Things arenít the way they
used to be.
have tried to fight back and thatís good. Now as a
retired entrepreneur and businessman, am I savvy? Yes.
Other people would have wrote a check for $640 and been
done with it. But I fight it because I know itís