Medical bills often cripple many Americans from making financial progress.
Medical bills can cripple people for years.
Even with medical insurance, a debilitating illness or injury can produce a mountain of debt even for the most fiscally responsible people.
To make matters worse, those outstanding bills could once be used to adversely affect a person’s credit score, preventing them from building wealth and gaining financial stability.
Thanks to the outgoing administration of President Joe Biden and Vice President Kamala Harris that will soon no longer be the case.
“No one should be denied economic opportunity because they got sick or experienced a medical emergency,” said Vice President Harris.
She added, “This will be life-changing for millions of families, making it easier for them to be approved for a car loan, home loan or a small-business loan.”
Although the numbers are not known, Harris estimates that 100 million people struggle paying off medical debt.
ABC News reported that the new law could eliminate $49 billion in unpaid medical bills.
That could possibly impact 15 million Americans, boosting borrowers’ credit scores by 20 points.
Elizabeth Schulze of ABC News reported, “Major credit reporting agencies have already announced voluntary steps to remove medical debts from their report.
“The final rule is set to take effect in March—but that timeline could be delayed by legal challenges.
“Debt collection industry groups like the Association of Credit and Collection Professionals have opposed the change, saying it would result in ‘reduced consequences for not paying your bills, which in turn will reduce access to credit and health care for those that need it most.’”
However, the problem that many people have about the healthcare industry is that even though many have good medical coverage, insurance companies often limit what they pay for anyway by denying or delaying coverage for as long as possible.
Therefore, many Americans often go into tremendous debt because insurance companies refuse to pay for legitimate services although the person might have been paying their premiums faithfully for decades.
Often a life and death decision must be made whether the insurance company pays for the service or not.
So, families decide whether to go into debt or choose premature death for their loved ones.
That reality is why many Americans have cheered and celebrated Luigi Mangione, the alleged killer of United Healthcare’s CEO, Brian Thompson.
Insurance companies often get rich by people paying their monthly or quarterly premiums.
Then when insurance is needed, the insurance companies try everything they can to deny or delay coverage.
So, the money that should go to pay for medical expenses goes into the coffers of companies trying not to provide the services that they promised they would.
“People who get sick shouldn’t have their financial future upended,” Rohit Chopra of the Consumer Financial Protection Bureau (CFPB) said in a press release. “The CFPB’s final rule will close a special carveout that has allowed debt collectors to abuse the credit reporting system to coerce people into paying medical bills they may not even owe.”
Many people have gotten charged for medical expenses by mistake.
Tami Luhby of CNN reported, “The measure, which was proposed last June, takes effect in 60 days after it was published in the Federal Registrar.
“However, Republican lawmakers who control Capitol Hill and the incoming Trump administration, which has vowed to eliminate regulations could upend the rule. Congress has a limited period of time when it can review and rescind final rules, which has typically happened when a new president takes office.”
In a statement, Mona Shah, senior director of policy and strategy at Community Catalyst said, “This rule will provide relief to millions of people that have unfairly had their credit impacted simply because they got sick. Nobody, no matter where we live or how much money we have, should be forced to make the impossible choice between getting essential care or going into debt. And they should not have to worry that medical debt could prevent them from buying a house or securing an auto loan because of its impact on their credit.”
CNN also reported, “The rule also bans lenders from using medical devices, such as wheelchairs or prosthetic limbs, as collateral for loans and bars them from repossessing the devices if patients are unable to repay the loans. However, lenders can continue to consider medical information in certain situations, including when a consumer requests a loan to pay health expenses or asks for a temporary postponement of loan payments for medical reasons.”
Additionally, experts believe that the new rule on medical bills will result in the approval of 22,000 additional mortgages annually.
CNN added, “In a related effort, Harris announced on Tuesday that states, counties and cities have eliminated more than $1 billion in medical debt for more than 750,000 Americans, using funding from the 2021 American Rescue Plan Act. States and municipalities are on track to wipe out an estimated $7 billion in medical debt for nearly three million Americans by the end of next year.
“In addition, she noted, North Carolina has set up a medical debt relief program in which the state’s 99 eligible hospitals have promised to eliminate up to $4 billion in unpaid bills for nearly two million low- and middle-income residents, as well as have policies in place that reduce the chance that future patients will incur debts. In exchange, the participating hospitals become eligible for enhanced Medicaid reimbursements.”
