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Are You a Veteran? A New VA Rule on Medical Debt May Help You.

If you are a Veteran, the U.S. Department of Veterans Affairs (VA) has recently finalized a new rule that may be helpful to you.

The new rule changes how the VA reports medical debts to consumer reporting agencies. When a creditor reports a debt to a reporting agency, that lowers your credit score, making it more difficult and more expensive to get loans, mortgages, credit cards, or even rent an apartment or get a cable or phone account.

Medical debt is a major burden and can be a source of continuing stress for anyone. An American Cancer Society Cancer Action Network survey found that roughly half of patients said that they had cancer-related medical debt. Medical debt is not found to be a good predictor for creditworthiness, and unexpected medical bills should not have the ability to damage a person’s credit history.  Luckily, this new rule helps to stop that from happening.

What Medical Debt Will Be Reported Under the New Rule?

Under the new rule, the VA will only report medical debt when:

  • The outstanding debt is more than $25.00;
  • The VA has determined the individual responsible is not catastrophically disabled or entitled to free medical care from the VA due to low income; and
  • The VA has exhausted all other debt collection efforts and the specified debt becomes classified as not collectible.

What is the Expected Impact?

Prior to this new rule, the VA Debt Management Center was reporting about 5,000 delinquent veteran accounts each month. Some of these reports include debt resulting from the overpayment of benefits, which is not the fault of the veteran.

It is estimated that these new changes will result in reducing the amount of unfavorable debt reported to CRAs by 99%, which is a huge win for veterans.

The new rule will help address the financial distress many families face when medical debt unfairly hits their credit report.

For more information about managing finances, visit TriageCancer.org/Financial.

For more information about navigating insurance, visit TriageCancer.org/HealthInsurance.

About Triage Cancer

Triage Cancer is a national, nonprofit providing free education to people diagnosed with cancer, caregivers, and health care professionals on cancer-related legal and practical issues. Through eventsmaterials, and resources, Triage Cancer is dedicated to helping people move beyond diagnosis.

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