Posted on Sep 22, 2023
Medical debt could soon be barred from ruining your credit score
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https://www.npr.org/sections/health-shots/2023/09/21/ [login to see] /medical-debt-credit-score-cfpb-biden
The Biden administration announced a major initiative to protect Americans from medical debt on Thursday, outlining plans to develop federal rules barring unpaid medical bills from affecting patients' credit scores.
The regulations, if enacted, would potentially help tens of millions of people who have medical debt on their credit reports, eliminating information that can depress consumers' scores and make it harder for many to get a job, rent an apartment, or secure a car loan.
New rules would also represent one of the most significant federal actions to tackle medical debt, a problem that burdens about 100 million people and forces legions to take on extra work, give up their homes, and ration food and other essentials, a KFF Health News-NPR investigation found.
The Biden administration announced a major initiative to protect Americans from medical debt on Thursday, outlining plans to develop federal rules barring unpaid medical bills from affecting patients' credit scores.
The regulations, if enacted, would potentially help tens of millions of people who have medical debt on their credit reports, eliminating information that can depress consumers' scores and make it harder for many to get a job, rent an apartment, or secure a car loan.
New rules would also represent one of the most significant federal actions to tackle medical debt, a problem that burdens about 100 million people and forces legions to take on extra work, give up their homes, and ration food and other essentials, a KFF Health News-NPR investigation found.
Medical debt could soon be barred from ruining your credit score
Posted from npr.org
Medical
Health
Economics
Posted 7 mo ago
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PO1 William "Chip" Nagel
..."The three major credit reporting agencies announced Friday that they will strip 70% of medical debt information out of consumers’ credit reports, starting July 2022.
The bureaus — Equifax, TransUnion and Experian — say that medical collection debt will no longer appear on credit reports if that debt has already been paid. The agencies are also increasing how long it takes for that debt to appear on a consumer’s report, from six months to one year. And starting sometime in “first half of next year,” they will also remove unpaid medical collection debt from reports if it’s less than $500.
One of the agencies’ regulators, the Consumer Financial Protection Bureau (CFPB), had been considering a ban on medical debt before these changes were announced.
As of the second quarter of 2021, 58% of bills that were in collections and on people’s credit records were medical bills, according to a recently published CFPB report on medical debt. But the report also found that medical debt collections were “less predictive of future payment problems than other debt collections,” like mortgages or car loans.
Nearly 1 in 10 Americans carry medical debt over $250, according to a recent Kaiser Family Foundation study. And people of color are disproportionately affected by medical collection debt, a recent National Consumer Law Center report found."...
..."The three major credit reporting agencies announced Friday that they will strip 70% of medical debt information out of consumers’ credit reports, starting July 2022.
The bureaus — Equifax, TransUnion and Experian — say that medical collection debt will no longer appear on credit reports if that debt has already been paid. The agencies are also increasing how long it takes for that debt to appear on a consumer’s report, from six months to one year. And starting sometime in “first half of next year,” they will also remove unpaid medical collection debt from reports if it’s less than $500.
One of the agencies’ regulators, the Consumer Financial Protection Bureau (CFPB), had been considering a ban on medical debt before these changes were announced.
As of the second quarter of 2021, 58% of bills that were in collections and on people’s credit records were medical bills, according to a recently published CFPB report on medical debt. But the report also found that medical debt collections were “less predictive of future payment problems than other debt collections,” like mortgages or car loans.
Nearly 1 in 10 Americans carry medical debt over $250, according to a recent Kaiser Family Foundation study. And people of color are disproportionately affected by medical collection debt, a recent National Consumer Law Center report found."...
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