Biden administration tackles medical debt | national news

One in three adults in the United States struggle with medical debt, which now counts as the biggest source of debt in collections — more than credit cards, utilities and auto loans combined.

According to a White House fact sheet, black and Hispanic households are more likely to have medical debt than white households.

The White House said it should help give more families the chance to thrive.

“Together, these actions will help hold medical providers and debt collectors accountable for harmful practices, reduce the role medical debt plays in determining whether Americans can access credit — opening new opportunities for people with medical debt to buy a home or get a small business loan, help more than half a million low-income U.S. veterans get their medical debt forgiven, and educate consumers about their rights,” said the administration said in a statement.

The White House has said medical debt isn’t just a financial problem. This can have negative health effects.

“Getting sick or caring for loved ones shouldn’t mean financial hardship for American families,” administration officials said.

“That’s why the administration is taking new steps to ease the burden of medical debt and protect consumers from predatory collection policies.”

The White House said the planned actions build on President Joe Biden’s April 5 executive order on strengthening access to affordable, quality health care coverage, which directed federal agencies to take measures to reduce the burden of medical debt.

Vice President Kamala Harris on Tuesday announced reforms in four areas that will ease the burden of medical debt, protect consumers and open up new opportunities for Americans looking to buy a home or start a small business,” the statement said. White House.

Actions include making suppliers and collectors accountable.

“Providers have a responsibility to offer non-predatory payment plans or financial assistance to all eligible patients,” the White House noted.

“Although many do, far too many eligible patients report not receiving help. Worse still, lawsuits against patients for medical expenses are on the rise. And when hospitals sell unpaid bills to third-party debt collectors, patients can be subjected to persistent and aggressive collection practices.

The administration noted that the federal government contributes about $1.5 trillion a year to the health care system to provide patients with quality care and services.

Providers receiving this funding should make it easy for eligible patients to receive the financial assistance to which they are entitled and should not directly or indirectly subject patients to illegal and harassing debt collection practices, the White House said.

Department of Health and Human Services Secretary Xavier Becerra plans to ask the agency to assess the impact of provider billing practices on access and affordability of care and on the accumulation of medical debt.

Officials said HHS will request data from more than 2,000 vendors on medical bill collection practices, patient lawsuits, financial assistance, financial product offerings, and contracting or contracting practices. purchase of debt by third parties.

The Department will, for the first time, evaluate this information in its grant-making decisions, release key data and policy recommendations to the public, and share potential violations with relevant law enforcement agencies.

Separately, the Consumer Financial Protection Bureau (CFPB) will investigate credit reporting companies and debt collectors who violate patient and family rights and hold violators accountable.

The White House added that the administration also plans to improve government underwriting practices, as the latest research has found that medical debt is not a reliable indicator of overall financial health.

They said an analysis of 5 million anonymized credit files found that consumers who had medical debt paid their bills at the same rate as those who did not.

Including repaid medical debt causes credit scores to underestimate creditworthiness by up to 22 points.

“As a result, including medical debt in credit reports and in credit scores and loan underwriting may prevent Americans from accessing financial opportunities while not improving accuracy and predictability. loan programs,” the White House said in the statement.

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