Health care debt shouldn’t ruin credit

The Biden Administration has recently pitched a plan that would keep unpaid medical bills from destroying someone’s credit score. We think that is a brilliant idea.
According to the Tampa Bay Times, one in three U.S. adults has medical debt, which between 2009 and 2020 became the largest source of debt American owed collections agencies, totaling at least $140 billion, information which the paper gleaned from the Journal of the American Medical Association. That $140 billion doesn’t include all medical bills owed to health care providers, only the outstanding debt held by collection agencies. Some 11 million Americans have medical debt above $2,000. Three million people have debts above $10,000. In fact, medical bills have become the largest source of debt in collections—more than credit cards, utilities and auto loans combined.
Not counting medical debt toward your credit score could literally be life-changing for many people. There are far too many people who due to not having insurance, having insurance won’t cover certain procedures, billing errors, or whatever reason, have gigantic debt that has nothing to do with frivolous spending on credit cards or other irresponsible spending often associated with huge debt. Having medical debt count toward a credit score just puts people further behind the eight ball through no fault of their own.
The health care system in the U.S. is beyond broken. Time Magazine reports the U.S. now spends more than $4 trillion a year on health care—nearly 20 percent of gross domestic product—yet U.S. life expectancy lags literally dozens of other nations by as much as seven years. If trends continue, the U.S. will drop to 64th in the world in life expectancy by 2040, though we will continue to spend significantly more per capita than nearly any other nation.
Health care systems want profit. The greed in the health care industry is staggering. The money is in the treatment, of course, not in the cure. Medicines cost outrageous amounts of money. People are calling Uber and Lyft for rides to the hospitals because ambulance rides cost thousands of dollars. A ride on Life-Flight? Now you’re talking tens of thousands.
The fact that much of the quality of our health insurance is tied to jobs is a topic for another day, but if someone suffers a torn ACL tripping on a curb, is diagnosed with cancer, etc., these are things mostly beyond our control. As we rack up debt with surgery or trying to save our own life, the vultures should not circle and our credit ruined because the cost of health care in this country is out of control.
We applaud the Biden Administration for this move. If we can’t fix health care in this country, let’s at least not have it ruin our lives in more ways than one.


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