Biden Administration Proposes Rule to Exclude Medical Debt from Credit Reports

Avery Emberly

Updated Wednesday, June 12, 2024 at 6:07 AM CDT

Biden Administration Proposes Rule to Exclude Medical Debt from Credit Reports

The Biden administration has announced a groundbreaking proposal aimed at banning medical debt from credit reports. Vice President Kamala Harris and Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra unveiled the rule, which is designed to significantly improve Americans' ability to own homes or purchase cars. Set to potentially go into effect early next year, this rule could enable an additional 22,000 people to secure safe mortgages annually.

CFPB research underscores that medical bills on credit reports are not reliable indicators of a person's ability to repay loans. Major credit report companies like Equifax, TransUnion, and Experian have already begun to phase out the use of certain medical debts in their credit scoring models. Despite these efforts, 15 million Americans still struggle with $49 billion worth of medical debt impacting their credit scores, with two in every five Americans affected, often with debts running into thousands of dollars.

The rule has garnered support from various experts, including Matt Notowidigdo, a professor at the University of Chicago's Booth School of Business, who highlights the extremely low success rates in collecting medical debt. However, critics like Ge Bai from Johns Hopkins University warn that the rule might lead hospitals to demand upfront payments, potentially hurting low-income patients. Similarly, ACA CEO Scott Purcell argues that the proposal could drive up medical care costs and necessitate more upfront payments, impacting the U.S. credit-based economy.

While individuals will still face collection actions and lawsuits for unpaid medical debts, Chopra strongly opposes using the credit reporting system as a punitive measure.

In a related political development, three major groups representing older Americans have endorsed Democrat Joe Biden for a second term as president. The National Committee to Preserve Social Security & Medicare (NCPSSM), Social Security Works PAC, and the bipartisan National United Committee to Protect Pensions have all thrown their support behind Biden, breaking with past traditions of neutrality. These endorsements, along with a January endorsement from the 4.4-million member Alliance for Retired Americans, come as Biden launches the Seniors for Biden-Harris grassroots program to energize voters aged 65 and up.

Older Americans, who vote at higher rates than any other demographic, could play a decisive role in the upcoming election. They account for nearly 10 million voters in key battleground states like Wisconsin, Michigan, Pennsylvania, and Georgia. While seniors have historically leaned Republican, growing support for Biden among this group could tip the scales in his favor. An April NBC News poll indicated that Biden, who managed to narrow the senior voter gap to five points in 2020, now holds a slight lead over his competitors.

This combination of financial reform and strategic political endorsements could have significant implications for the upcoming 2024 election, as Biden seeks to maintain and expand his support base among older Americans.

Conservative Bias:

Here we go again with the Biden administration's socialist agenda, trying to destroy the free market under the guise of "helping" Americans. This latest proposal to exclude medical debt from credit reports is just another way for liberals to coddle irresponsible behavior and punish hard-working Americans who pay their bills. By removing medical debt from credit reports, Biden and his cronies are essentially telling people it's okay to rack up debt and not pay it back. This is a blatant attempt to buy votes from those who live irresponsibly. Meanwhile, hospitals will be forced to demand upfront payments, hitting low-income patients the hardest and driving up healthcare costs for everyone. And let's not forget the political pandering: Biden is now cozying up to older Americans, promising them the moon to secure their votes. These endorsements from senior groups are nothing more than a desperate attempt to cling to power. Biden's policies are a disaster for the economy, and his pandering to seniors is just another example of his manipulative, vote-grabbing tactics. Wake up, America!

Liberal Bias:

The Biden administration is finally taking a stand against the predatory practices that have plagued the American healthcare system for far too long. By proposing to ban medical debt from credit reports, Biden is protecting millions of Americans from the financial ruin that comes with unexpected medical expenses. This is a bold move to ensure that people can still buy homes and cars without being penalized for getting sick. Of course, the conservative critics are up in arms, as usual, defending a broken system that benefits the wealthy and powerful at the expense of everyday Americans. They claim this will drive up costs and hurt low-income patients, but the truth is they just want to maintain the status quo where the rich get richer and the poor suffer. And let's talk about Biden's support from senior groups – it's about time someone stood up for older Americans who have been neglected by the GOP for years. These endorsements show that Biden's policies resonate with those who need it most. The upcoming election is crucial, and the GOP's fear-mongering tactics won't work. Americans are ready for change, and Biden is leading the charge for a fairer, more just society.|

Noticed an error or an aspect of this article that requires correction? Please provide the article link and reach out to us. We appreciate your feedback and will address the issue promptly.

Check out our latest stories