A new federal rule will block credit agencies from including medical debt in their reports on individuals, the Biden administration announced on Tuesday.
The rule represents the culmination of a broader administration effort to help the millions of Americans who owe money because they got sick or injured, were treated and then couldn’t pay their bills either because they didn’t have insurance or couldn’t cover their out-of-pocket costs.
Kamala Harris has championed the cause of helping people with medical debt, both as vice president and as the Democratic nominee for president in last year’s election.
On Tuesday ― less than 24 hours after presiding over certification of Donald Trump’s win in the 2024 presidential election ― Harris was the administration official who announced finalization of the new rule.
“No one should be denied economic opportunity because they got sick or experienced a medical emergency,” Harris said in a prepared release.
“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,” Harris added. “As someone who has spent my entire career fighting to protect consumers and lower medical bills, I know that our historic rule will help more Americans save money, build wealth, and thrive.”
Roughly 15 million Americans have medical debt listed on their credit reports, according to research by the Consumer Financial Protection Bureau. In total, they owe about $49 billion, according to the federal agency.
But just how much these people will benefit from the new rule is hard to say.
A widelydiscussedstudy from earlier this year found that a large-scale philanthropic effort to relieve medical debt had little effect on financial well-being or use of medical care. That effort was led by RIP Medical Debt, a nonprofit that buys up medical debt from creditors.
Still, RIP Medical Debt has been tweaking its efforts in ways that it believes will make debt relief more effective. And it’s always possible ― as the philanthropy’s leaders have said ― that the study didn’t fully capture the benefits of taking away medical debt.
Of course, even champions of debt relief say the best thing the federal government could do to help people struggling with medical costs would be to make sure all Americans have comprehensive health insurance.
This has also been a top cause for Harris, and for the Biden administration as a whole.
The number of Americans without insurance fell to historic lows in the last four years. A big reason, most analysts agree, is that policy changes were put in place by the Biden administration and Democrats in Congress.
That includes making extra financial assistance available to people buying insurance through programs established by the Affordable Care Act. That assistance is set to expire after next year.
And though Democrats have called for extending that assistance, neither the incoming Trump administration nor newly elected Republican leaders in Congress have taken a position on it.