Lost credit delays the dream of buying a home

It makes me sick about the medical costs and how this whole thing is done.

Amanda Pitzo

Joe Pitzo, 42, Brookfield, Wisconsin

Approximate medical loan: 350,000

Medical problems: Cancer

What happened: Joe Pitzo and his wife Amanda were married just five months ago, when Joe was diagnosed with brain cancer in 2018. She will need brain surgery and extensive rehabilitation.

They were planning to buy a house for their mixed family of five children. Instead, they diverted their attention to doctor’s visits, insurance papers, and hospital bills. And their money falls apart.

“It took a big toll on my credit,” Joe said. “It’s gone close to zero.”

Joe insured through his employer. Prior to her brain surgery, the couple confirmed that the surgeon and the hospital were on their insurer’s network. But around 4pm the day before the procedure, their insurer stated that a device the surgeons had planned to use was medically unnecessary. It was not covered.

Joe and Amanda proceeded with the surgery, realizing that they could deal with the bills later.

Bill, it turned out, topped $ 350,000.

Joe said the debt has dragged his credit score into the hundreds of points.

Their best hope for a home loan became Amanda, who didn’t have much credit, he said. He will not take out a mortgage or a car loan.

What’s broken: Difficulties with health insurance are a common feature of medical loans in the United States

According to a nationwide survey conducted by the KFF, two-thirds of Americans with healthcare loans said they did not pay the bill in full because they expected their health plan to cover it.

But health insurance rules and restrictions are often so complex that even hardworking patients struggle to understand them.

It is also not uncommon for medical loans to hurt patients’ credit scores. The pressure is on to change that.

This spring, the three leading credit agencies announced that they would stop using small past-outstanding medical bills to calculate credit scores. And the Federal Consumer Financial Protection Bureau plans to investigate whether any healthcare bills should be counted.

What’s left: Pitzos Hospital was able to reduce their charges to about ,000 30,000.

They worked to make Amanda Credit so she could apply for a loan and finally be able to buy a home in the spring of 2022.

They are still paying about $ 19,000 in medical bills.

“It makes me sick about the medical costs and how this whole thing is done,” Amanda said.

About this project

“Diagnosis: Debt” is a reporting partnership between KHN and NPR that explores the scale, impact, and causes of medical debt in the United States.

The series draws on the “KFF Health Care Date Survey”, a poll designed and analyzed by KFF public opinion researchers in collaboration with KHN journalists and editors. The survey was conducted online and by telephone in English and Spanish from February 25 to March 20, 2022, in a nationally representative sample of 2,375 U.S. adults, including 1,292 adults with current healthcare loans and 382 adults with healthcare loans. The last five years. The margin of sample error is plus or minus 3 percentage points for full sample and 3 percentage points for those who have current debt. For results based on subgroups, the margin of sample error may be higher.

Additional research was conducted by the Urban Institute, which analyzes data from the Credit Bureau and other populations on poverty, race, and health status to find out where medical debt is concentrated in the United States and what factors are involved with high debt levels.

The JPMorgan Chase Institute analyzed records from a sample of Chase credit card holders to see how the balance of customers could be affected by major medical expenses.

KHN and NPR reporters also conducted hundreds of interviews with patients across the country; Talks with physicians, healthcare industry leaders, consumer lawyers, debt lawyers and researchers; And review studies and survey scores about medical loans.

KHN (Kaiser Health News) is a national newsroom that creates in-depth journalism about health issues. KHN is one of the three major operating programs of KFF (Kaiser Family Foundation), including policy analysis and polling. KFF is a non-profit organization that provides health information to the nation.

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