Kicking Them While They're Down: Trump Team Gets Mean on Medical Debt
They just can't stop hurting the consumer's champion
Medical debt is insidious.
First, it shouldn’t exist - no one should face crippling debt simply because they got sick.
Second, the presence of medical debt on credit reports means that sickness can be a double whammy - impacting one’s access to credit, housing, and employment.
Republicans are apparently fans of medical debt - at least based on how some in Congress see the issue:
A recent report notes that Sen. Mike Rounds of South Dakota and Rep. Ralph Norman of South Carolina have filed legislation that would nullify the CFPB rule and allow medical debt to continue to appear on credit reports.
The Consumer Financial Protection Bureau rule means that millions of Americans with unpaid medical bills will not face adverse credit decisions as a result, but a bill introduced Wednesday by Senator Mike Rounds (R-SD) and Representative Ralph Norman (R-SC) is urging lawmakers to overturn it.
While 15 million Americans have medical debt on their credit reports, some 100 million Americans have some form of medical debt.
Those 15 million people in the United States with medical debt on their credit reports owe some $49 billion.
However, analysis of medical debt and consumer credit indicates that medical debt is not a reliable indicator of creditworthiness. After all, anyone can get sick and end up owing a hospital or health care provider.
Now, the Trump Administration is joining in on the pile-on to saddle Americans with a medical debt penalty.
Chloe Rogers of Americans for Financial Reform writes:
The Trump-appointed leadership of the CFPB and the lobby group for credit bureaus, the Consumer Data Industry Association, just asked a federal judge to vacate the medical debt rule. The Trump administration is siding with the credit bureaus, effectively asking the court to strike down the very protections the CFPB once championed.
At risk are financial protections for 15 million impacted people in the United States, which could unravel before they’ve even taken hold.
Medical debt has zero value for predicting whether someone will pay their debts — which is the whole point of a credit score! That’s a fact backed by the CFPB’s own research. Including it on credit reports doesn’t help lenders assess risk — it simply punishes people for being sick, hospitalized, or denied insurance coverage.
With federal enforcement weakened - and state laws in the pipeline - what do you do if you have a complaint about a bad actor in the financial marketplace?
First, start with your state’s Attorney General.
Attorneys General typically have consumer protection divisions and can apply relevant state laws to your situation. Sometimes, if an AG asks, a company will answer.
Second, let your Member of Congress know. One, they may be able to assist with a resolution. But also, it is important for Congress to know their constituents value the work formerly performed by CFPB. Congress can rescue the consumer champion from the DOGE Death Star . . . if they want to.