Her Credit score Was Ruined by Medical Debt. She’s Been Turned Away From Medical doctors, Jobs, and Loans
“It’s like you’re being punished for being sick.”
Penelope Wingard, 58, Charlotte, North Carolina
Approximate Medical Debt: More than $50,000
Medical Issue: Breast cancer
What Happened: After a year of chemo and radiation, in 2014, Penelope Wingard finally heard the news she’d been praying for: Her breast cancer was in remission. But with relief immediately came worry about her finances.
Wingard had received Medicaid coverage through a temporary program for breast cancer patients. When her treatment ended, she became uninsured.
Bills for follow-up appointments, blood tests, and scans quickly piled up. Soon, her oncologist said he wouldn’t see her until she paid down the debt.
“My hair hadn’t even grown back from chemo,” Wingard said, “and I couldn’t see my oncologist.”
It took about six months to find a doctor who would see her while unpaid bills accrued.
Wingard was later diagnosed with an aneurysm that required brain surgery and, separately, vision problems that prompted corneal transplants in both eyes. Within a few years, she was buried under tens of thousands of dollars in medical debt.
She learned to recognize the phone numbers of bill collectors and ignore the past-due notices arriving in the mail. She wanted to pay them but had to prioritize rent, utilities, and food. After taking care of those expenses, she had little money left from her jobs as a covid-19 contact tracer and a driver for ride-hailing services.
The unpaid medical bills began hitting her credit. Soon, she struggled to qualify for loans. Applying for apartments and jobs became a nightmare.
“It’s like you’re being punished for being sick,” Wingard said.
What’s Broken: Unpaid medical bills can be reported to credit agencies and show up as black marks on a person’s financial record, making it harder to qualify for a car loan, rent an apartment, or get a job.
Earlier this year, three national credit agencies announced new policies that would remove from credit reports paid medical debts and those that are less than $500 even if they are unpaid.
The changes, slated to go into full effect in 2023, are expected to benefit an estimated 16 million Americans.
But millions of Americans who owe far more than $500 may not benefit — 1 in 4 U.S. adults with health care debt owe more than $5,000, according to a KFF poll conducted for this project; 1 in 8 owe more than $10,000.
A recent report by the Consumer Financial Protection Bureau also suggests that the changes to credit reports may disproportionately benefit wealthier Americans living in predominantly white neighborhoods. They’re more likely to have health insurance, experts say, and collections under $500 often come from an unpaid copay or coinsurance.
In contrast, people with the highest levels of medical debt tend to be Black or Hispanic, have low incomes, and live in the South. According to the KFF poll, 56% of Black adults and 50% of Hispanic adults said they have debt because of medical or dental bills, compared with 37% of white adults. And a study published in 2021 found that medical debt was highest within low-income communities and in Southern states that had not expanded Medicaid.
As an uninsured Black woman living in North Carolina, Wingard sits squarely among the communities hit hardest by medical debt. Yet she will not benefit from the credit agencies’ new policies.
What’s Left: Wingard has resigned herself to living with medical debt. That means worrying that another doctor will turn her away because of unpaid bills and having employers reject her from jobs because poor credit shows up as a red flag on background checks.
Her fridge and stove have both been broken for over a year. She can’t qualify for a loan to replace them, so instead of making baked chicken from her favorite family recipe, she often settles for a can of soup or fast-food chicken wings.
But there are signs that help is on the way. The Biden administration has asked the Consumer Financial Protection Bureau to investigate whether medical debt should ever appear on credit reports, and some states — including North Carolina — are considering strengthening protections against medical debt.
Wingard is hopeful she’ll get relief soon. “I’m hoping someone will listen and say we need to focus more on health care for all Americans,” she said. “I don’t know if they will, but it’s just a blind hope.”
About This Project
“Diagnosis: Debt” is a reporting partnership between KHN and NPR exploring the scale, impact, and causes of medical debt in America.
The series draws on the “KFF Health Care Debt Survey,” a poll designed and analyzed by public opinion researchers at KFF in collaboration with KHN journalists and editors. The survey was conducted Feb. 25 through March 20, 2022, online and via telephone, in English and Spanish, among a nationally representative sample of 2,375 U.S. adults, including 1,292 adults with current health care debt and 382 adults who had health care debt in the past five years. The margin of sampling error is plus or minus 3 percentage points for the full sample and 3 percentage points for those with current debt. For results based on subgroups, the margin of sampling error may be higher.
Additional research was conducted by the Urban Institute, which analyzed credit bureau and other demographic data on poverty, race, and health status to explore where medical debt is concentrated in the U.S. and what factors are associated with high debt levels.
The JPMorgan Chase Institute analyzed records from a sampling of Chase credit card holders to look at how customers’ balances may be affected by major medical expenses.
Reporters from KHN and NPR also conducted hundreds of interviews with patients across the country; spoke with physicians, health industry leaders, consumer advocates, debt lawyers, and researchers; and reviewed scores of studies and surveys about medical debt.