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.
The significant difference is that medical debt in the US is not usually elective. I can choose to sign up for a credit card, or I can choose to apply for a house/car loan, or I can choose to go to college, or I can choose to start a business. Are you gonna choose to ignore going to the ER when you break your arm, or are having chest pains, or are airlifted after a drunk driver T-bones your car? Are you gonna refuse your child’s chemotherapy or dialysis treatments?
The US medical system is fucked up from top to bottom.
(Also note I’m not commenting on whether elective debt in the US is fair, only highlighting the difference between medical debt and other debts.)