Medical Debt Responsibility Act: Needed?

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Examples of billing mistakes can cost you money and your credit rating.

Mike and Laura Park thought their credit record was spotless. The Texas couple wanted to take advantage of low interest rates, so they put their house on the market and talked to a lender about a mortgage on a bigger home in the Dallas-Fort Worth suburbs.
Their credit report contained a shocker: A $200 medical bill had been sent to a collection agency. Although since paid, it still lowered their credit scores by about 100 points, and it means they'll have to pay a discount point to get the best interest rate. Cost to them: $2,500....
The Parks had no idea a billing error they'd sorted out a year earlier - they never actually owed the $200 - could affect their credit. They didn't know the bill for a copayment on a PET scan Mike needed had been sent to a collection agency.
"We've prided ourselves in having impeccable credit. We worked hard to establish that," said Laura Park, a 51-year-old office manager married to a 53-year-old firefighter. They are going ahead with the home purchase while trying to fix their credit report.
"I'm very upset," Park said. "It's going to be a nightmare and who knows how long this is going to take to resolve."

Even taking the time to try and find out what you owe can end up costing you.

Iraq veteran Steve Barnes and his wife, Tara, were refinancing their home through a VA program when they found out from their mortgage banker that nearly $600 in unpaid medical bills had brought down their credit scores. It means they'll have to pay an extra $1,700 in additional fees to the lender to get the lowest interest rate.
Bills for treatment last fall related to his wife's cancer had been turned over to a collection agency while Barnes was still talking with his insurance company about what would be covered, he said.
"We pay our bills," said Barnes, 33, the postmaster in Nocona, Texas. "As soon as they were brought to our attention, we paid them." But the collection could stay on their credit reports for seven years, even though it's now paid.

http://www.google.com/hostednews/ap...WtF66Q?docId=e6b97db54e0147f3b8c1f41a25f92e96

Congress is looking into legislation, Medical Debt Responsibility Act, that may address these issues but we will see if it comes to fruition.

People work hard all their lives and it seems we are always on the edge of cliff leading to financial disaster, sometimes not of our own making.