The Biden-Harris administration, in conjunction with the Consumer Financial Protection Bureau, has taken the first steps to remove medical debt from Americans’ credit reports. With millions in medical debt, the administration’s intention is to make it easier for people to obtain loans or a mortgage.
In April 2022, the Biden-Harris administration issued a press release about lessening the burden of medical debt. The announcement set forth progress in four areas: holding debt collectors and medical providers accountable, reducing the role of medical debt in credit, forgiving medical debt for veterans, and informing Americans of their rights.
The press release outlined not only the impact of medical debt on the country but also its impact on Americans’ health. Specifically, the release noted that many with debt avoid seeking care.
Additionally, in March 2022, major credit reporting companies announced they would no longer report some — but not all — medical bills on credit reports.
The proposal to remove medical debt from credit reports was also suggested based on common mistakes and inaccuracies in medical billing. Recent steps have also pushed to prevent the use of medical bills to make loan decisions and the use of credit ratings to pressure those in medical debt.
A notice with proposed updated rules will be issued next year.
Sources: Associated Press, September 21, 2023. The White House, April 11, 2022.