Americans’ medical debt crisis: Fight over credit report protections intensifies

(InvestigateTV) — Americans borrowed an estimated $74 billion to cover medical expenses, according to a West Health-Gallup survey.

Now, an effort is underway to reverse a rule set by the Consumer Financial Protection Bureau (CFPB) that would remove medical debt from credit reports.

Before being removed by the Trump istration, former CFPB Director Rohit Chopra spoke about the agency’s efforts to shield consumers from the negative impacts of medical debt appearing on credit reports.

“We know people should pay medical bills that they truly owe,” Chopra said. “But they shouldn’t be threatened harassed or bullied into paying something they’re not supposed to be paying.”

However, the CFPB’s rule faces significant opposition. From lawsuits to legislative challenges, several efforts aim to overturn the regulation.

The Consumer Data Industry Association (CDIA) and Cornerstone Credit Union League have filed lawsuits arguing the CFPB is acting outside of its statutory authority in regulating the reporting of medical debt.

Additionally, several Republican lawmakers have expressed interest in eliminating the CFPB entirely, including efforts to reverse protections around medical debt.

Patricia Kelmar, Senior Director of Health Care Campaigns at U.S. PIRG, argues that the drive to roll back the medical debt protections is largely financially motivated.

“Mostly the businesses that are doing the debt collection that are making a lot of money,” Kelmar explained. “They can threaten you even for a bill that you don’t actually owe and tell you, you know, your credit score is going in the tank because of this medical bill. But the reality is, you’re still fighting that medical bill.”

She said that around 14 million Americans have medical debt on their credit reports. She warned these reports can have long-term consequences, potentially preventing people from qualifying for car loans or mortgages.

“Medical bills are very different when it comes to debt,” she noted. “First of all, no one is planning medical bills, right? We are not purposely getting into an accident. We are not purposely getting a bad, expensive diagnosis. So, it’s not really indicative of foolish spending.”

With uncertainty surrounding the future of medical debt reporting rules, Kelmar advised consumers to proactively protect their credit by:

• Double check medical bills to ensure they accurately reflect the care received.
• Regularly review personal credit reports
• Take advantage of the right to a free annual credit report to monitor scores

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