New protections for servicemembers and veterans alert

We recently found that about one in three consumers have been contacted by a creditor or debt collector in the past year, and more than half of those contacted cited  medical debt as the reason for the contact. Regardless of income level, age range, and credit scores, medical debt is consistently the category most cited for having past-due bill issues by all consumers.

This new law gives veterans greater credit reporting protections on certain medical debts owed to private medical providers when the VA has authorized payment for those services. The new law also grants credit reporting protections when the VA is wrongly charging a veteran for medical services.

With the passing of the VA Mission Act in June 2018, veterans will have increased access to private sector health care options available to them, which will likely increase the volume of veterans relying on the VA to pay their private medical bills on time. The OSA will continue to monitor how these new changes will impact medical debt complaints from veterans

Upon the effective date, the nationwide credit reporting agencies (CRAs) will be prohibited from reporting certain veterans’ medical debts incurred within one year of the care or services if they know that the information relates to veterans’ medical debt. 

If CRAs continue to report medical debts that should be excluded, veterans will be allowed to dispute these medical debts with the CRA provided that they send the CRAs either a VA notification that the VA has assumed liability for the debt, proof of the VA’s liability for payment, or documentation that the VA is in the process of paying the debt. Upon receiving this information, the CRAs must delete all information related to the debt in question from the veteran’s credit report and notify the furnisher of the information and veteran of that deletion.

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Finally, the VA must establish a database that will allow nationwide CRAs to easily verify a veteran’s medical debt to determine whether they must exclude it from the veteran’s credit report.

These provisions will become effective on May 24, 2019.

This article by was distributed by the Personal Finance Syndication Network.

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