(TNS) — Millions of Americans with medical debt, including nearly 700,000 Pennsylvanians, will no longer have to fear their debt will tarnish their credit scores.
Vice President Kamala Harris on Tuesday called the finalized rule by the Consumer Financial Protection Bureau (CFPB) “historic’ and something that would help more Americans be able to save money and ”thrive.”
“This will be life-changing for millions of families, making it easier for them to be approved for a car loan, a home loan, or a small-business loan,” she said.
Some $49 billion in medical debt is held by 15 million Americans, according to the Biden administration.
The administration also touted federal legislation that has helped states and municipalities use American Rescue Plan funds to eliminate over $1 billion in medical debt for more than 700,000 Americans.
Gov. Josh Shapiro in his 2024 budget address proposed a medical debt relief program to forgive $400 million in debt owed by Pennsylvania residents. The legislation was unsuccessful last year, but Shapiro said he was pleased to see the federal government taking action and that he would revive his plan.
“I’ve heard firsthand from folks being crushed by medical debt — especially in our rural areas,” he said. “Those stories and those people matter — and that’s why I’ve proposed wiping out hundreds of millions of dollars in medical debt for the people who need it most, protecting them from debt collectors who go after their credit scores.”
Patrick Keenan, director of policy and partnerships for the Pennsylvania Health Access Network, said he thought the credit report rule was a good first step but that more needs to be done.
“We need to think about stopping medical debt in the first place,” he said, adding that the new rule doesn’t mean the debt goes away.
“It’s an important step so families have more security but we need state lawmakers to take additional action.”
He said a survey by his organization showed 1 in 4 Pennsylvania adults said they or a family member had medical bills overdue. He also said that Dauphin County has one of the highest rates of residents with medical debt in the commonwealth.
Keenan said passing the debt relief bill and a hospital cost transparency bill in the state would go a long way toward more fully addressing the problem.
There are concerns among healthcare advocates and others about the future of the CFPB, an independent federal agency formed to ensure the public is treated fairly by banks and other lenders. They fear the agency might be dismantled or its power to regulate banks curtailed under the incoming Trump administration.
Trump advisers Elon Musk and Vivek Ramaswamy, tapped to run Trump’s proposed Department of Government Efficiency, have said they support eliminating the bureau.
