
(AP) – Unpaid medical bills will no longer appear on credit reports, where they can block people from mortgages, car loans or small business loans, according to a final rule announced Tuesday by the Biden administration.
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The Consumer Financial Protection Bureau rule will remove $49 billion in medical debt from the credit reports of more than 15 million Americans, according to the bureau, which means lenders will no longer be able to take that into consideration when deciding to issue a loan.
The change is estimated to raise the credit scores by an average of 20 points and could lead to 22,000 additional mortgages being approved every year, according to the bureau. Vice President Kamala Harris said in a statement announcing the rule that it would be “lifechanging” for millions of families.
“No one should be denied economic opportunity because they got sick or experienced a medical emergency,” she said.
Harris also announced that states and local governments have used a sweeping 2021 pandemic-era aid package to eliminate more than $1 billion in medical debt for more than 700,000 Americans.
The administration announced plans for the rule in fall 2023.
The CFPB said that medical debt is a poor predictor of an individual’s ability to repay a loan. Experian, Equifax and TransUnion, the three national credit reporting agencies, said last year that they were removing medical collections debt under $500 from U.S. consumer credit reports.
The new rule from the Biden administration is set to take on the outstanding bills appearing on credit reports.
This might seem like good news but it doesn’t address the real issue and will create new ones. There will now be a wave of people who will ignore medical bills. This might cause medical fees to rise to offset the loss. Furthermore which I’ve already seen, some doctors will not do surgery without receiving payment upfront.
The government still hasn’t done anything to deal with the hidden hospital pricing and the ridiculous cost of treatment
another stupid thing to do to add to his legacy
why would smart people become doctors when they can do the market
nursing homes or real estate
if docs dont get paid they wont work for nothing
After all the shots in the dark, President Biden finally hit one bullseye..
It won’t help because the lenders will now require twenty more points on your credit score.
Joe Biden is a natural born leader.