We are a philanthropic nonprofit that purchases and abolishes medical debt nationwide for struggling patients. Things are just about to get much worse.
In early July, a judge in the Eastern District of Texas vacated a federal rule that would have kept $49 billion in medical debt off the credit reports of 15 million people. The reversal of the Consumer Financial Protection Bureau’s medical debt credit reporting ban comes on the heels of Congress passing the “One Big Beautiful Bill Act” (OBBBA) — a disastrous piece of legislation for the issue of medical debt that is expected to end healthcare coverage for almost 17 million people across the country over the next decade.
This is not progress.
OBBBA brings with it the biggest cuts ($1 trillion from Medicaid alone) to U.S. healthcare programs ever. From people with disabilities, to people buying coverage on the ACA marketplace, to seniors enrolled in Medicare—everyone can expect to see significant cuts to their coverage. With this loss in coverage will come a huge increase in medical debt — $50 billion — eroding much of the gains we’ve made over the past few years. At least 300 rural hospitals, already operating on tight margins, will be more vulnerable to private equity takeover or face the difficult decision as to whether they can afford to keep their doors open — eliminating access to healthcare for some people almost overnight. Many people will choose to go without, avoiding and deferring healthcare until they can’t.
The situation is ugly, but there are things we can do.
People in the United States will not only accumulate more medical debt due to these unprecedented cuts. They will now also have to face the looming threat of that debt being included on their credit reports — hamstringing their ability to crawl out from beneath the cycle of medical debt — thanks to the recent court ruling. Together, Congress and the CFPB have left Americans worse off than they were even a month ago — both less healthy and less financially secure.
Medical debt is not controversial — over 90% of U.S. adults agree that elected officials must pass policies that protect people from medical debt. Instead, Congress has done the opposite. Millions more people must now face the impossible tradeoff of U.S. healthcare — do I prioritize my physical, mental, or financial health?
We know the healthcare market is broken; variations in pricing, opaque billing practices, and confusing insurance plans all combine to make seeking medical care feel like a roll of the economic dice. The public is frustrated, hungry for change, and ready to see their elected representatives do something that brings people together. Instead, we find ourselves being dragged back to an era of high rates of uninsured, bare bones insurance plans, and even more people being forced to choose between seeing the doctor or protecting their credit score; this bill has kneecapped extremely popular healthcare programs and left states rushing to try and figure out how to stanch the bleeding. At a time when people are demanding affordable healthcare, the government is implementing policies that will do the opposite. It is hard to see how any of this addresses what voters want — a more equitable system where everyone can have their basic healthcare needs met without fear of crushing medical debt.
And yet, there is hope; states have always been the laboratories of policy changes, and as they take action to protect their residents from the harm of medical debt (16 states and counting have passed legislation banning medical debt on credit reports), we must build on this momentum. We must come together and step into the breach to try and mitigate some of the most egregious harms on the horizon. We must speak loudly about the impact of medical debt on all of us — and demand a better system. Nearly everyone agrees something must be done to address medical debt, and what we’re seeing now has completely failed to meet the moment — in fact, it has made things exponentially worse. We must stand together — patient, provider, insurer, advocate — to face down a looming medical debt catastrophe and redouble our work to build a healthcare system that protects, rather than punishes, patients. The fight to end medical debt is not over, it is only just beginning.
Allison Sesso is president and CEO of national nonprofit Undue Medical Debt.