Medical debt is often the most disputed part of a consumer's credit report, because insurance payments can take time, and oftentimes patients do not have the means to fully pay a medical bill if insurance is not covering a procedure that has already taken place.
The Consumer Financial Protection Bureau has drafted what's known as an interpretative rule related to the Fair Credit Reporting Act, interpreting the law in a way that says the FCRA should preempt any state laws or regulations when it comes to how debt should be reported to the credit bureaus like Experian, Equifax and Trans Union. This repeals previous Biden-era rules and regulations that allowed states to implement their own credit reporting bans.
- The Kaiser Family Foundation estimates that Americans owe roughly $220 billion in medical debt. In Republican-controlled states like South Dakota, Mississippi, West Virginia and Georgia, roughly one in six Americans have outstanding medical debt, according to the KFF. Having outstanding, delinquent medical debt can impact the ability for an individual to apply for a mortgage, a credit card or an auto loan.
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