Kamala Harris Announces New Federal Rule to Help People with Medical Debt

The Biden administration has made a significant move to address the financial burden many Americans face due to medical debt. On Tuesday, Vice President Kamala Harris announced a new federal rule that will block credit agencies from including medical debt in reports on individuals. The rule aims to support the millions of Americans who have found themselves in debt due to medical emergencies, illnesses, or treatments they could not afford. This initiative comes as a culmination of the administration’s broader efforts to alleviate the struggles of those burdened by medical debt.

 “This will be life changing for millions of families, making it easier for them to be approved for a car loan, a home loan, or a small-business loan,” Harris said. “As someone who has spent my entire career fighting to protect consumers and lower medical bills, I know that our historic rule will help more Americans save money, build wealth, and thrive.”

While the rule represents a crucial policy shift, it remains uncertain just how much it will immediately improve the financial well-being of those with medical debt. One study from earlier this year found that efforts by nonprofit organizations, such as RIP Medical Debt, to relieve medical debt had little impact on financial well-being or the use of medical care. RIP Medical Debt has been purchasing and forgiving medical debt, but the results of these philanthropic actions have been mixed.

Despite these uncertainties, RIP Medical Debt has continued refining its approach, hopeful that its debt relief efforts will be more effective in the future. The organization and others advocating for medical debt relief believe that forgiving such debt has the potential to provide long-term benefits for individuals, even if short-term results are harder to measure.

While the administration’s new rule is an important step toward tackling medical debt, it is clear that a comprehensive solution to the underlying issues of health insurance and out-of-pocket costs is still needed. For now, millions of Americans can take solace in knowing that they will no longer be penalized by credit agencies for medical debt, giving them a better chance at securing financial opportunities. The new rule represents a win for those who have long been advocating for changes to help people with medical debt, and it’s a reminder of the ongoing need for reform in the healthcare system.