Summarize this content to 2000 words in 6 paragraphs Joe Biden has blocked unpaid medical bills from appearing on credit reports according to a final rule announced Tuesday by the Biden administration.Why It MattersUnpaid medical bills showing on credit reports can block people from mortgages, car loans or small business loans.What To KnowThe new rule will remove $49 billion in medical debt from the credit reports of more than 15 million Americans, according to The Consumer Financial Protection Bureau (CFPB).This means lenders will no longer be able to take medical debts into consideration when deciding to issue a loan.
U.S. President Joe Biden speaks during a reception for new democratic members of the United States Congress in the State Dining Room of the White House on Jan. 5, 2025 in Washington, DC. Biden has…
U.S. President Joe Biden speaks during a reception for new democratic members of the United States Congress in the State Dining Room of the White House on Jan. 5, 2025 in Washington, DC. Biden has blocked unpaid medical bills from appearing on credit reports, it was announced on Tuesday.
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Medical Debt and CreditMedical debt is a poor predictor of an individual’s ability to repay a loan, the CFPB said.Experian, Equifax and TransUnion, the three national credit reporting agencies, already said last year that they were removing medical collections debt under $500 from U.S. consumer credit reports.How Much Medical Debt Do Americans Have?Research indicates that nearly one in 12 American adults has unpaid medical debt.Americans owed a total of $220 billion in medical debt in February 2024, with approximately 14 million people (six percent of adults) indebted by more than $1,000.Around three million people (one percent of adults) owed medical debt of more than $10,000.However, in a speech announcing initial plans for the ruling in 2023, Vice President Kamala Harris said that states and local governments have already used a 2021 pandemic-era aid package to eliminate more than $1 billion in medical debt for more than 700,000 Americans.
Vice President Kamala Harris talks to reporters after presiding over a joint session of Congress to confirm the Electoral College votes at the Capitol, Monday, Jan. 6, 2025, in Washington. Harris said that a new…
Vice President Kamala Harris talks to reporters after presiding over a joint session of Congress to confirm the Electoral College votes at the Capitol, Monday, Jan. 6, 2025, in Washington. Harris said that a new rule on credit reports would be “lifechanging” for millions of families.
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What People Are SayingKamala Harris said that it would be “lifechanging” for millions of families. “No one should be denied economic opportunity because they got sick or experienced a medical emergency,” she said.Carrie Joy Grimes, founder and CEO of WorkMoney, told Newsweek: “Taking medical debt off credit reports would be a life-changing win for millions of Americans.””Medical bills on your credit report can negatively impact your ability to buy a home, purchase a vehicle, or get a job. This ruling will help raise the credit scores of millions and puts the focus on getting well when you get sick, rather than fighting with debt collectors about money.”Capio CEO Mark Detrick told Newsweek that there could be “unintended consequences” by removing medical debt from credit reports.”This proposed rulemaking is likely to drive an increase in litigation against vulnerable patients and could disincentivize the payment of medical expenses or the maintenance of health insurance.””These outcomes would ultimately harm doctors, hospitals, and the patients we aim to protect.”What Happens NextThe ruling is expected to raise credit scores by an average of 20 points and could lead to 22,000 additional mortgages being approved every year, according to the CFPB.This article includes reporting from The Associated Press
