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Biden Administration Taking Action to Reduce Medical Debt
Move comes amid reports of $88 billion in medical debt on credit reports
Following an announcement that the White House is taking action to offer consumers relief from medical debt, the National Consumer Law Center (NCLC) applauded the move and said it would benefit patients who are struggling with debt as a result of an illness.
“We appreciate the White House’s efforts to improve protections for consumers facing medical debt, especially directing the Department of Health and Human Services to examine whether healthcare providers are providing adequate financial assistance for economically struggling uninsured or underinsured consumers,” said Jenifer Bosco, staff attorney at the National Consumer Law Center. “We have seen too many patients face lawsuits and debt collection from nonprofit hospitals when they should have received hospital financial assistance instead.”
A previous report from the Consumer Financial Protection Bureau (CFPB) notes that Americans have $88 billion in medical debt on their credit reports.
In the announcement today, the White House indicated:
Secretary Becerra is directing the Department of Health and Human Services (HHS) to evaluate how providers’ billing practices impact access and affordability of care and the accrual of medical debt. HHS will request data from more than 2,000 providers on medical bill collection practices, lawsuits against patients, financial assistance, financial product offerings, and 3rd party contracting or debt buying practices. The Department will, for the first time, weigh this information in their grantmaking decisions, publish topline data and policy recommendations for the public, and share potential violations with the relevant enforcement agencies of jurisdiction.
Advocates at the NCLC said the White House action is a key step and that potential action by the CFPB could also help consumers:
“Medical debt is a large portion of all the accounts being collected by collection agencies,” said April Kuehnhoff, staff attorney at the National Consumer Law Center. “The CFPB should require debt collectors to inform consumers about the availability of financial assistance, clarify that medical debt that the consumer reports should be covered by insurance must be treated as disputed, and bring enforcement actions against collectors engaging in abusive credit reporting practices.”
The Biden Administration indicated the CFPB will take some action:
The (CFPB) will investigate credit reporting companies and debt collectors that violate patients’ and families’ rights and hold violators accountable.