Press Article: Biden Administration Moves to Shield Consumers from Medical Debt Impact on Credit Reports
In a significant move just weeks before the Biden administration concludes, credit reporting agencies—including TransUnion, Equifax, and Experian—will temporarily halt the inclusion of unpaid medical bills on credit reports. This decision mirrors a pioneering state law passed in Colorado in 2023 that already prohibits such practices.
Misty Castaneda, a resident of Colorado’s Western Slope and a staunch advocate for the change, expressed her excitement about this new federal protection. Having faced substantial medical debt herself due to a congenital heart condition, she has shared her harrowing experiences both locally and on Capitol Hill. Following surgeries during her childhood, Castaneda found herself in $200,000 worth of debt, leading to struggles with housing and employment, particularly as her credit history was marred by unpaid medical bills.
Castaneda, who credits the Affordable Care Act with giving her insurance options following an abusive marriage, has seen her life improve since advocating for the elimination of medical debt from credit reporting. Organizations like the Colorado Center on Law and Policy emphasize that medical debt does not equate to being a poor credit risk, as many reports contain inaccuracies—including duplicates or paid bills—leading to unjust consequences for consumers.
The Biden administration’s initiative is poised to remove $49 billion in medical debt from the credit records of over 15 million individuals. Despite pushback from banks, which argue that it may lead to irresponsible lending, Vice President Kamala Harris underscored that economic opportunity should not be hindered by health crises. As the rule is set to take effect in spring, the future remains uncertain under the incoming administration, but the efforts to alleviate the financial burden on consumers continue to gain traction.