The Medicare Prescription Payment Plan and Beneficiary Credit Scores

Posted September 11, 2024

Important information as we move into 2025, and more Medicare beneficiaries accumulate medical debt through the Medicare Prescription Payment Plan (M3P).

At present, if a Part D Enrollee were to default on a M3P balance greater than $500, it would have significant impact to their FICO score.

This may change soon due to the pressures from the Consumer Financial Protection Bureau that Eric Bricker, MD discusses in the video below.

Due to the fact that Part D Enrollees could find themselves in greater than $500 of M3P debt and not know until upwards of a month after taking their prescriptions home, I hope FICO is no longer able factor in this debt.

Here is the post I wrote Friday, detailing how and why hashtagMedicare hashtagPartD Enrollees may be blind to their hashtagPresciptioncosts at the POS in the hashtagM3P.

https://lnkd.in/eaGCP6A9

hashtagmedicareprescriptionpaymentplan hashtagmpp hashtagcms hashtagaep hashtagaep2025

Learn How MedicalDebt Impacts Your CreditScore.

Unpaid medical bills are written off by hashtagdoctors, hashtaghospitals and other healthcare providers and sent to hashtagcollections agencies.

Collections agencies then report the debt to the big three Credit Bureaus: TransUnion, Equifax and Experian. The Credit Bureaus then send that data to the two credit scoring companies: FICO and VantageScore®.

The problem with this process is that 80% of medical bills are hashtagincorrect, so the debt and its impact on a person’s credit score is incorrect as well. Medical Debt can frequently decrease a credit score by 50-110 hashtagpoints

The Federal Government has tried to hashtagdecrease this impact of medical debt on credit scores by pressuring the Credit Bureaus to no longer hashtagrecord medical debt of less than $500. This change occurred in 2023 and resulted in the percent of Americans with medical debt on their credit rating hashtagdecreasing from 14% to 5%.

VantageScore even hashtagvoluntarily stopped counting ALL medical debt when calculating a person’s credit score. However, FICO–which is used by 90% of lenders–still counts medical debt greater than $500 against a person’s credit score.

The Consumer Financial Protection Bureau is trying to hashtagban all medial debt from being used in a person’s credit score, but as of August 2025, no official regulatory change has occurred.

Sources at AHealthcareZ YouTube Channel.