Non-Credit Data and Credit Files

Washington, DCSeptember 23, 2010

Medical Payment Data:Accuracy and Implications

Mark Rukavina, DirectorThe Access Project

rukavina@accessproject.org(617) 275-2825

The Access Project

National health research and advocacy organization supporting local health access improvement efforts

Mission: work to strengthen community action, promote social change, and improve health, especially for those who are most vulnerable

Provide technical assistance to local efforts through research, policy analysis, community engagement, and communication services

Nationally recognized for expertise on issue of medical debt

Today’s Presentation

Background on Consumer Credit Reports

Data on Healthcare Affordability and Medical Debt

Accuracy of Medical Payment Data on Reports

Medical Debt and Asset Building

Strategies for Mitigating Medical Debt Short Term - Negotiating Reduction of Medical Debt and

Elimination of Payment Data Long Term Systems Change - HR 3421 – Medical Debt Relief

Act

Questions

Consumer Credit ReportsContents of a report include:

Identifying Information - name, current and previous addresses, marital status, Social Security Number, date of birth, spouse's name, number of dependents, and employment information.

Credit Information - credit account numbers, the creditor's name, the amount of last payment, the credit limit of the account and the timeliness of the credit payments.

Public Record Information -tax liens, court judgments, and bankruptcies.

Inquiry Section – list of all creditors that have requested and reviewed a copy of the credit report.

Consumer Reporting Agency Data

Approximately one billion consumer credit reports are issued annually in the United States

One billion credit cards are in use in the United States

Four and a half billion pieces of data are entered monthly into credit records

The Big Three - Equifax, Experian, and TransUnion, maintain 200 million credit files, in the United States

Unaffordable Health Care Costs Plague American Families72 million American adults (41%) under the age of

65 experienced medical bill problems Problems paying or unable to pay medical bill Contacted by a collection agency for unpaid medical

bill Changed way of life in order to pay medical bill Medical debt or

medical bills being paid off over time

Average Annual Worker and Employer Contributions to Premiums and Total Premiums for Family Coverage, 1999-2010

* Estimate is statistically different from estimate for the previous year shown (p<.05).

Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2010.

$5,791

$6,438*

$7,061*

$8,003*

$9,068*

$9,950*

$10,880*

$11,480*

$12,106*

$12,680*

$13,375*

$13,770*

How Important Are Medical Bills to American Families?

Medical Accounts on Credit Reports

More than half (52%) of accounts in collection are medical bills

28 million American adults were contacted by a collection agency for unpaid medical bills

How are Medical Bills Reported to the Consumer Reporting Agencies?

According to Experian, data provided directly by medical providers account for only 7/100’s of one percent of their data

TransUnion states that medical debts are not typically reported unless they become delinquent and are assigned to collections

Bills in collection are considered major derogatory accounts and lower credit scores

Why Are Medical Bills Sent to Collection?Millions of Americans have bills sent to collection

because they are confused about what they owe and what their health insurance covers.

According to one recent survey: Nearly 40 percent of respondents did not know what

services they were supposed to pay for, or the amount they owed

Nearly one-third (31 %) let a medical bill go to a collection as a result.

How Important Are Collection Accounts?

The Mix of Credit Accounts, Credit Cards, Department

Stores, Finance Companies,

Bank Loans, etc.10%

Record of Timely Payment on Other Loans

35%

The Amount and Type of

Outstanding Debt30%

Number and Types of Accounts

Opened Recently10%

Length of Credit History15%

Medical Debt and Trade Lines on Credit Reports

Lower credit scores and increase the cost of credit

Can influence potential employer hiring decisions

In general, if a credit background check revealed information that presented the job candidate’s financial situation negatively, what types of information are MOST likely to affect your decision to NOT extend a job offer?

Source: Society for Human Resource Management, Survey Report “Conducting Credit Background Checks”

Medical Collection Accounts

Credit Score with Medical Debt Removed

Short-term Strategies for Correction Medical Data on Credit

Reports

Verify Accuracy of Information on Credit Report – annualcreditreport.comRemove bills reported to collection in error

Pay Medical Accounts in CollectionNegotiate reduction in billsAgreement in writing from collection agency that

account will be deleted from credit report when paid in full

Legislative Proposal Removal of Paid-off Medical Accounts

from Credit ReportsHR 3421 and S 3419 – Medical Debt Relief Act

Requires removal of fully paid or settled medical accounts from credit reports within 45 days of achieving zero balance due on account

HR 3421 Voted favorably out of House Financial Services Committee awaiting action by full House

S 3419 Awaiting action in Senate

Questions?

Mark Rukavina, DirectorThe Access Project

rukavina@accessproject.org(617) 275-2825