The Biden administration is moving to ban medical debt from credit reports.
Vice President Kamala Harris said Tuesday that the proposed rule, taken through the Consumer Financial Protection Bureau, would reduce the number of Americans with medical debt listed on their credit reports to zero, down from 46 million in 2020.
In a press call Tuesday, Harris said the move would help improve the financial health and wellbeing of millions of Americans.
Medical debt, she said, “makes it more difficult to get by, much less get ahead. That is simply not fair.”
The administration calculates that if implemented, the rule would raise affected individuals’ credit scores by an average of 20 points, and could lead to the approval of approximately 22,000 additional mortgages every year as a result of the cleaned-up credit reports.
A recent study estimated that one in five U.S. households live with medical debt, including people with health insurance; and that on average, a typical American household owes about $4,600 in medical debts.
I appreciate the move but changing definitions of credit worthiness isn’t going to fix the problem.
It’s going to fix a lot of problems for a lot of people that need help. Don’t do that, don’t be so set in needing Perfection that you allow people to suffer in the meantime.
Eh, the post you’re replying to isn’t anywhere close to as cynical as it could have been.
Frankly, the most generous interpretation of why this policy was put forward is an implicit acknowledgement that the way the US healthcare industry currently operates is adversely impacting the personal economies of a huge segment of the population in a way that isn’t really justified. With just a slight bit of cynicism, in that they they mention how it could affect mortgage acceptance rates, there’s also an acknowledgement of the knock-on effects this is having on other segments of the broader economy, which is probably what they care more about. And with just touch more cynicism we could say this is a move to garner more votes in the upcoming election. Or all of those things can be true simultaneously.
The state of the US health insurance industry and the relationship private equity has to healthcare in general really needs a complete overhaul. To say that this is a bandaid solution (if even that) isn’t the same as saying that it won’t do any good, and therefore shouldn’t be implemented.
It isn’t cynacle to say the president is doing things to get votes. That’s the president’s job - to do things the populous wants. That’s what a representative democracy is. It’s good for the president to do things that people want him to do.
How does it help them? Won’t credit card companies punish everyone and just assume everyone has the average amount of medical debt (or even worse) rather than pretend medical debt doesn’t exist?
It’s an incremental fix that is doable with the current state of government.
Is it perfect? No. It’s not. But it at least helps some people.
You’re letting the perfect be the enemy of the good.
cReDiT wOrThInEsS
like getting sick and living in america makes you unworthy?