The Biden administration is taking action to lessen the burden for Americans dealing with medical debt, Vice President Kamala Harris said Monday.
“Some debt collection companies harass consumers with dozens of phone calls a week,” Harris said during a briefing in the South Court Auditorium at the Eisenhower Executive Office Building.
“Remember what we are talking about — folks who are in the process of attempting to recover from an illness, for example. Debt collectors try to collect on debt that has already been paid. Some pose as law enforcement officials or threaten consumers with jail time. That sort of harassment and intimidation is unethical, and often it is illegal. And that is why the CFPB [Consumer Financial Protection Bureau] has made it a priority to hold debt collectors accountable.”
“One in three U.S. adults are saddled with outstanding medical debt,” said Shalanda Young, director of the Office of Management and Budget, who spoke before Harris. “It’s become the biggest source of debt and collections in our country, bigger than credit cards, utilities, auto loans, and other sources combined … It’s long past time that we do something about it.”
And medical debt is not spread evenly among communities, said Health and Human Services (HHS) Secretary Xavier Becerra, who also spoke at the event. “Americans with lower incomes, poorer health, and from communities of color have higher rates of medical debt,” he said. “More than two-thirds of debtors cite medical issues as contributing to their bankruptcy.”
Young said her team has been working with agency partners “to identify steps we can take at individual agencies and government-wide to reduce the negative impacts that the existence of medical debt has on families’ abilities to access federal credit programs. Life happens, and it’s time for families to stop paying the price for the rest of their lives.”
Harris also praised some actions being taken by the private sector. “Last month, the three largest credit reporting agencies announced that they will no longer include medical debt in credit scores if an individual has paid their debts, has unpaid debts less than a year old, or has accrued less than $500 in debt,” she said.
“This is an important first step forward and one that the President and I applaud.” However, according to the White House fact sheet, “this change leaves out a third of Americans with medical debt over $500. For example, 11 million Americans have medical debt above $2,000 and 3 million Americans have debt over $10,000. Further action is needed to help families struggling with medical debt.”