By Stacy M. Brown

NNPA Newswire Sr Natl Correspondent

Vice President Kamala Harris has announced a new Consumer Financial Protection Bureau (CFPB) rule to eliminate medical debt from consumer credit reports. The White House explained in a release that the action would remove $49 billion in unpaid medical bills, benefiting 15 million Americans by raising credit scores and improving access to home loans, cars, and small businesses.

Administration officials further noted that states and localities have already leveraged funds from the American Rescue Plan (ARP) to eliminate over $1 billion in medical debt for more than 700,000 Americans. These efforts are part of a broader push to reduce the financial strain caused by medical emergencies, with jurisdictions projected to eliminate roughly $15 billion in medical debt for up to six million individuals.

“No one should be denied economic opportunity because they got sick or experienced a medical emergency. That is why we have worked to cancel more than $1 billion in medical debt with support from the American Rescue Plan,” Harris remarked during the announcement. “This final rule ensures that medical debt will no longer be included in credit scores, transforming the financial futures of millions.”

Medical debt remains the largest source of debt in collections, surpassing credit card, utility, and auto loan debt combined. The CFPB has reported that medical bills are often riddled with errors and inflated charges, making them a poor indicator of an individual’s creditworthiness. Officials added that the rule would remove medical debt from credit reports, building on earlier changes by major credit agencies that excluded specific categories of medical debt.

According to administration data, jurisdictions including Cook County, Illinois; Cleveland, Ohio; and New Jersey have relieved hundreds of millions in medical debt for residents. For example, Cook County eliminated $382 million in debt for over 210,000 individuals. North Carolina recently launched an initiative to forgive up to $4 billion in medical debt for nearly two million residents, ensuring hospitals adopt policies that reduce the risk of future debt while improving financial assistance systems.

The Biden-Harris Administration has also implemented broader reforms to address the root causes of medical debt, including enforcing requirements for tax-exempt hospitals to provide financial assistance, simplifying debt forgiveness processes for veterans, and protecting consumers from surprise medical bills.

“This unprecedented rule reflects our commitment to lowering costs and creating pathways to financial stability for families across the nation,” Harris stated.