Americans would no longer have to worry about medical debts dragging down their credit scores under federal regulations proposed Tuesday by the Consumer Financial Protection Bureau.
If enacted, the rules would dramatically expand protections for tens of millions of Americans burdened by medical bills they can’t afford.
The regulations would also fulfill a pledge by the Biden administration to address the scourge of health care debt, a uniquely American problem that touches an estimated 100 million people, forcing many to make sacrifices such as limiting food, clothing, and other essentials.
“No one should be denied access to economic opportunity simply because they experienced a medical emergency,” Vice President Kamala Harris said Tuesday.
The administration further called on states to expand efforts to restrict debt collection by hospitals and to make hospitals provide more charity care to low-income patients, a step that could prevent more Americans from ending up with medical debt.
And Harris urged state and local governments to continue to buy up medical debt and retire it, a strategy that has become increasingly popular nationwide.
Credit reporting, a threat traditionally used by medical providers and debt collectors to induce patients to pay their bills, is the most common collection tactic used by hospitals, a KFF Health News analysis has shown.
Although a single unpaid bill on a credit report may not hugely affect some people, the impact can be devastating for those with large health care debts.
There is growing evidence, for example, that credit scores depressed by medical debt can threaten people’s access to housing and fuel homelessness. People with low credit scores can also have problems getting a loan or can be forced to borrow at…
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