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It can depend on the state and any specific rules that they have but generally, it isn’t reported on credit. At least not right away. I think there is a set amount of time the debt has to be active before collectors can report it.
Sometimes you can attempt to appeal an insurance carriers decision. I’ve seen people who are well connected have things overturned even if it was truly against a carriers practice. For example: a client forged documents to add their mother onto coverage as an employee. They did this to pay for cancer treatments she couldn’t afford through Medicaid or Medicare. It was uncovered during an audit and coverage was retroactively rescinded / claims reversed. The client got the issue in front of the right person at the state level and the carrier “approved an exception.”
Thank you, that’s helpful!