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When medical bills become medical debt, where's the relief?

There are those who say there is no health care system quite like the one we have in the United States. That may be a seen as a good thing or a bad thing. It seems to depend on what position you happen to be playing in the medical marketplace arena.

If you are a patient, the view of things may wind up being particularly bad. Some analysts say that might be because the ways medical billing systems work are often mysterious.

Consumer advocates note that there are few standards regulating the processes. Every company may have its own way of doing things and confusing bills can turn into medical debt in the hands of collectors before a person has had a chance to sort out all the whys and wherefores.

When that happens, a consumer might find they have suffered what amounts to a financial sucker punch to their credit score -- something they might not even feel until the next time they look to buy a car or a house. Whether bankruptcy stands as a viable option for relief from such pain is something to discuss with an attorney.

Some analysts say the lack of consistency in medical billing is a growing problem. They say that's because the portion of bills consumers are responsible for, even those that are insured, is increasing. Deductibles are going up, as are co-payments. At the same time, many doctors are on the payrolls of large managed practices. There's less flexibility to work out plans with patients who are strapped.

The federal Consumer Financial Protection Bureau has attempted to take action to insulate credit scores from the vagaries of the systems. But CFPB officials say they've been thwarted by the credit industry which sees medical debt collection as a major revenue source.

Bills to regulate practices have seen action by Congress, but none have ever won final passage. The issue is on the agenda in both chambers again this session. Who knows what will happen.

Meanwhile, industry observers say patients have a right to worry whether their medical bills might suddenly turn to credit-eroding debt.

Source: The New York Times, "When Health Costs Harm Your Credit," Elisabeth Rosenthal, March 8, 2014

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