Medical Insurance Can Ruin Your Credit Scores

Insurance is supposed to protect you, right?

Well, in some cases it does, and in others - it doesn't. Especially when it comes to your credit scores.

If your insurer decides to disallow all or part of your claim, the bill won't be paid. And you might not even realize it!

Medical bills are garbled at best, and they send them in little spurts, so it's difficult to see if they're all different, or duplicates. It takes concentration and a clear head to even figure out what you've been charged for, let alone what's been paid. When you're recovering from illness is not the best time to try to wade through them, so you're apt to just set them aside and trust that the insurance company will handle it.

So why wouldn't an insurance company pay? Two reasons. One of which has to do with the fine print in your policy. Some things they just won't pay for - or they'll only pay a reduced amount. And don't think you're OK because you were injured on the job. In some states, State Industrial Insurance is well-known for delaying payment or disallowing charges.

The other reason is data entry. All it takes is for one careless medical billing clerk to code your claim incorrectly and it will be disallowed. And think about that - most data entry people are just there putting in their time to get a paycheck until they can move on to something better. Accuracy is not the highest item on their priority lists.

If the bills aren't paid it could take several months before the doctor or hospital asks you to pay. And what if you can't? Medical bills are often too high to fit into the average family's monthly budget.

At this point you'll begin calling your insurance company and your medical providers in an attempt to straighten out the problem. But it could take so long that the bills will be turned over for collection.

You will be able to get these black marks removed from your credit report, but during the time you're struggling with it, your credit scores will have dropped to pitifully low levels.

So if you've had bills that were turned over to an insurance company for payment, get your free credit report today and see if any of them are now showing up in your name as unpaid. You may be surprised at what you find.