The Biden administration on Thursday announced plans to remove medical bills from Americans’ credit reports in a push to end what it called coercive debt collection tactics that affect millions of consumers.
Proposals under consideration would help families financially recover from medical crises, stop debt collectors from coercing people into paying bills they may not even owe, and ensure that creditors are not relying on data that is often plagued with inaccuracies and mistakes, Vice President Kamala Harris and Rohit Chopra, the top consumer finance watchdog, announced.
Harris told reporters that more than 100 million Americans had unpaid medical debt.
“Many of the debts people have accrued are due to medical emergencies,” she said. “We know credit scores determine whether a person can have economic health and wellbeing, much less the ability to grow their wealth.”
Chopra’s agency, the Consumer Financial Protection Bureau, reported last year that roughly 20% of Americans have medical debt, but CFPB said its data also showed medical billing data is a poor indicator of whether consumers’ are likely to pay down traditional debts.
The Brookings Institution think tank also found big gaps in medical debt statistics, with some 80% of debt held by households with zero or negative net worth, and communities of color hit especially hard. For instance, 27% of Black households hold medical debt compared with 16.8% of non-Black households.
According to the CFPB, the Fair Credit Reporting Act restricts the use of medical information in credit decisions and credit reports. The agency on Thursday announced policy outlines that could give rise to new regulations.
Medical debt exists because we have failed as a society.
Medical debt is terrifying. You can do everything right: get an education, get a good job in a high paying field, live in a low COL area, save money, etc, yet a single accident or medical emergency can wipe it all out and then some. One fucking incident can take you from being comfortable middle class to destitute. It’s insane that we allow that to happen.
While I agree with the sentiment, it’s not exactly true — a good job in a high paying field should offer ACA-compliant health plans, which are required to have an out-of-pocket maximum. But yeah — do everything right except sign up for decent insurance, and it can be a world of shit. Which is pretty embarrassing for my country.
What’s mind boggling to this Canadian, is many “Premium” health insurances which cost hundreds a month don’t do anything for you even when something happens until your bill reaches a deductible in the 1000s of USD!
Typical extended healthcare plans in Canada generally cover 60-100% of procedures, sometimes with a deductible of something almost always less than $100. I don’t have a clue what American insurance companies do other than screw their customers and pretend to know enough to deny treatment.
