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These results provide insight into the potential of further restrictions on medical debt reporting, including the Consumer Financial Protection Bureau’s recent announcement of a proposed rulemaking process to remove all remaining medical debt from credit reports. The announcement follows legislation that’s already passed in two states to remove all medical debt from credit reports: a Colorado law that went into effect in August 2023 and New York legislation, which passed the state legislature in June 2023 and is currently being reviewed by the governor.
Under these policies, the share of adults with medical debt on their credit records will continue to fall, and their credit scores based on other scoring models will likely continue to rise. However, these reporting changes don’t affect the underlying debt consumers owe to health care providers. With some exceptions, hospitals, other providers, and collection agencies can still sue patients to collect on unpaid medical bills. Reducing the burden of medical debt and its wide-ranging consequences would likely require health insurance reforms that build on the Affordable Care Act to further protect consumers from out-of-pocket medical expenses they can’t afford.
It will also be important to monitor provider billing and collection practices in response to concerns that removing medical debt from credit reports could have unintended consequences, such as increased efforts among providers to obtain upfront payment before delivering care or reliance on other collection strategies. Because the credit reporting changes occurred recently, there’s not yet an evidence base to assess these concerns, underscoring the need for further research. Household surveys, court records, and information collected from providers will be increasingly important sources of data for examining these questions, as well as tracking the prevalence of medical debt as less of this debt appears on credit reports.
