Biden-Harris Administration Releases a Statement on Medical Debt
On April 11, the Biden-Harris Administration released a statement on new actions to protect consumers and reduce the burden of medical debt on families.
The statement says that “One-in-three adults in the United States have medical debt. It is now the largest source of debt in collections—more than credit cards, utilities, and auto loans combined. Black and Hispanic households are more likely to hold medical debt than white households.”
Vice President Harris, according to the statement, announced reforms in four areas that will lessen the burden of medical debt, protect consumers, and open new opportunities for individuals who want to buy a home or start a small business.
The four areas include:
- Holding providers and collectors accountable
- Improving government underwriting practices
- Supporting veterans in financial hardship
- Helping consumers know their rights
“When families cannot afford to pay the cost of care—often because they are uninsured or underinsured—providers have a responsibility to offer non-predatory payment plans or financial assistance to all eligible patients,” the statement says. “While many do, far too many eligible patients report not receiving help. Worse, lawsuits against patients over medical bills are on the rise. And when hospitals sell outstanding bills to third party debt collectors, patients can be subjected to persistent and aggressive collections practices.”
That said, “The federal government pays roughly $1.5 trillion a year into the health care system to provide patients with quality care and services. Providers receiving that funding should make it easy for eligible patients to receive the financial assistance they are entitled to, and should not directly or indirectly subject patients to illegal and harassing debt collection practices.”
The statement addresses improving government underwriting practices by explaining that the Biden-Harris Administration is now offering guidance to all agencies to eliminate medical debt as a factor for underwriting in credit programs, whenever possible and consistent with law.
Regarding veterans in financial hardship, the statement says that “Veterans Affairs (VA) will now make it easier and faster for lower-income veterans to get their VA medical debt forgiven. Currently, veterans in financial hardship who need medical debt relief from VA must fill out a complex, paper form with complicated eligibility requirements. The application process is confusing, time-consuming, and as a result, veterans may be deterred from applying for much-needed relief. To address these problems and ensure that veterans get the relief they deserve, VA will streamline the request process, including offering an online option to apply, and set a simple income threshold to qualify for relief.”
The statement concludes on fourth area, helping consumers know their rights. The Consumer Financial Protection Bureau is going to scale up its consumer education tools. The tools will help families navigate the complicated medical billing landscape.
