Your daily adult tube feed all in one place!
Biden to ban medical debt from credit reports in latest attempt to boost election hopes
The Biden Administration will today announce a rule to get rid of medical debt from credit reports.
The rule could boost the chances of millions of Americans to buy a car and allow 22,000 more people to get approved for mortgages each year, the administration says.
It will be announced later today by Vice President Kamala Harris and Consumer Financial Protection Bureau Director Rohit Chopra.
Administration officials say the rule shows that they are lowering costs, but critics have warned that it may lead to more doctors requiring upfront payments for care.
Biden has previously been accused of attempting to 'buy' votes with debt forgiveness measures such as his student loan relief plan.
Pictured on Monday night: Joe Biden, Dough Ehmoff, Kamala Harris, Philonise Floyd, Keeta Floyd l, the brother of the late George Floyd
The proposal — in the works since September — was revealed by Chopra in an interview with ABC News.
It could go into effect sometime next year, he said — potentially making the rule dependent on Biden winning the election in November. It is not clear whether Donald Trump has similar plans.
'Our research shows that medical bills on your credit report aren't even predictive of whether you'll repay another type of loan,' he said.
'That means people's credit scores are being unjustly and inappropriately harmed by this practice.'
Research from the CFPB estimated that 15million Americans are having their credit scores affected by medical debt, valued at $49billion.
A number of credit companies — including Equifax, TransUnion and Experian — have already voluntarily stopped using medical debt when calculating credit scores.
But Biden administration officials want to bring in the rule to make the practice industry-wide.
They said the rule change would also lead to credit scores no longer being affected by bills under dispute, which the agency regularly receives complaints about from patients.
More than two in five Americans are affected by medical debt, which totaled more than $220billion nationwide by the start of 2022.
Once someone receives a hospital bill, they generally have at least 120 days to pay it off.
If they fail, it goes to collections or an agency which tries to recover the unpaid amount — a shift which impacts people's credit scores.
This means that they are loaded with higher interest rates when making other purchases, such as when buying a house or a car.
The above shows the share of US households with medical debt by age group
The above shows the actions families have taken in order to pay off medical debt
Some experts have welcomed the rule change, pointing out that medical debt collection is already normally unsuccessful.
Estimates suggest that only 24.5 percent of attempts to collect unpaid medical debt are successful.
But others warned it could lead to more Americans paying off medical bills, which could lead to hospitals demanding upfront payments for care.
Dr Ge Bai, an accounting health policy expert at Johns Hopkins University in Maryland, made the warning — saying the move could leave low income patients worse off.
'I think in the short run, it will be great news for patients, and probably we'll see advocacy groups pushing it,' she said.
'However, I think in the long-run, when the long-term negative effects emerge, probably we're going to see more pushback.'
This is already happening in some areas, including Florida, where some hospitals are refusing to carry out surgeries without receiving payment first.
Trisha Churchwell's mother said she was given seven weeks to pay $2,000 for surgery to help her daughter breathe. The mother, who works three jobs and has no savings, said that if they couldn't find the money then the surgery would be rescheduled
Heather Miconi, from Merrit Island in the state, was among those to reveal she was asked to pay $2,000 upfront to get her daughter surgery so that she could breathe.
Trista Churchwell has obstructions in her airways, including adenoids — tissue at back of nasal passage — tonsils and bony nose structures called turbinates.
Her mother was given seven weeks to come up with the money to pay for the surgery, and told if she could not pay then it would be rescheduled.
She already works three jobs and has no savings, and said 'there's no way' she would be able to afford the procedure. It was eventually covered via donations on a GoFundMe, the Wall Street Journal reported.
For years, hospitals and surgery centers performed procedures before sending bills to patients.
But some fear there is now a shift, as this often left them chasing after patients for payment, repeatedly sending invoices and enlisting debt collectors.