Medical Debt Relief On the Way
A prescription for eventual sanity
While the existence of medical debt represents a moral and policy failure, the fact is, it exists.
In fact, 15 million people in the United States owe some $49 billion in medical debt that is in collections.
$49 Billion in Medical Debt
Despite some changes by the Big 3 credit bureaus, some 15 million Americans currently have medical debt on their credit reports. A new report from the Consumer Financial Protection Bureau (CFPB) sheds light on the ongoing medical debt crisis. The report shows that medical debt reported by credit reporting agencies tot…
When medical debt goes into collections, it shows up on credit reports. This impacts a credit score and can have implications for access to credit - including renting or buying a home, borrowing for a car, and even getting a job.
What’s worse, research suggests that medical debt does not correlate to overall credit/borrowing behavior.
So, it’s welcome news that the Consumer Financial Protection Bureau (CFPB) is taking steps to eliminate all medical debt from being reported on consumer credit reports.
"The CFPB is seeking to end the senseless practice of weaponizing the credit reporting system to coerce patients into paying medical bills that they do not owe,” said CFPB Director Rohit Chopra. "Medical bills on credit reports too often are inaccurate and have little to no predictive value when it comes to repaying other loans."
This is a step toward sanity.
Next stop - a system that doesn’t put millions of people into debt simply because they get sick.
Will we ever be able to get rid of these credit bureaus?