Money Talk: Calling back a bill from collections

Dear Liz: My primary care physician referred me to a gynecologist for a medical issue. I called the office three times and asked that the appointment be made as an annual exam.

During the appointment, the doctor was rude and critical of my body and lifestyle. (I am obese.) I left the appointment in tears before it was over.

Five months later, I got a $160 bill for the appointment. My insurance denied the claim twice, saying the doctor was double charging, but the office fought back, saying the charge was for the referral, not the annual exam.

I have tried to work with the doctor’s office and my insurance, but now the bill has gone to collections. It’s knocked my FICO score from 780 to 680 in a matter of months.

Part of me does not want to pay the bill because of the abuse I received from the doctor. However, this is affecting my finances. Would it help my FICO score if I negotiated with the bill collector and then repaid a part of the bill? What are my options?

Answer: Your best option is to ask the doctor’s office, politely, to take back the collection account in exchange for your paying the bill in full.

The doctor should not have been rude to you. But you shouldn’t have tried to get a referral for a medical issue treated as an annual exam. You were probably trying to avoid a co-pay, because health plans typically cover this type of preventive care, but that’s not why you were there.

You could ask whether the bill collector will delete the account from your credit reports. You would almost certainly have to pay the bill in full to win this concession, and even then the odds are against it.

That’s why it’s better to ask the medical provider to take back the account. In many cases, medical providers place accounts with collectors on assignment and have the ability to pull them back if they want.

The latest version of the FICO credit scoring formula ignores paid collections and treats unpaid medical collections less harshly than other collections. But that formula is just starting to be adopted, and the more commonly used previous version, FICO 8, ignores only collections worth less than $100.

As you’ve seen, even one dispute can lead to a big drop in your scores. If you feel an issue is worth pursuing, it often makes sense to pay the disputed bill and then seek justice in Small Claims court.

Dear Liz: My former husband is 11 years older than I, and we were married for 15 years. I am 54 and have not remarried.

When I turn 62, can I claim a spousal benefit based on his Social Security record because he’s already reached full retirement? Or do I have to be at my own full retirement age of 67 before I can claim the divorced benefit?

I was thinking that I could start claiming a spousal benefit at 62 and then wait until I am 70 to see which benefit is larger — half of his or mine with three years of 8% annual delayed retirement credits added in. If mine is more at that point, I could switch.

Is that possible or is that double dipping? He has made much more money than I have through the years, but he has also been unemployed off and on. I have made less money, but have been employed consistently throughout my life, so I’m not sure whose will be more when it all shakes out.

Answer: If you start spousal benefits or divorced spousal benefits early, your check will be permanently reduced and you’ll lose the option to switch later — even if your own benefit would have been larger.

When you apply for Social Security benefits before your full retirement age, you’ll be “deemed” to be applying for both your own benefit and any spousal benefits to which you’re entitled. If your spousal benefit is larger, you’ll be given your own benefit plus an amount to make up the difference. Once you start your benefit, it stops growing except for cost-of-living increases.

It’s only if you wait until your full retirement age to file that you have the option of filing a “restricted” application for spousal benefits only. Then you’ll preserve the option of switching to your own benefit later if it’s larger.

Questions may be sent to Liz Weston, 3940 Laurel Canyon, No. 238, Studio City, CA 91604, or by using the “Contact” form at asklizweston.com. Distributed by No More Red Inc.