The rule, initially finalized in January and slated to take effect at the end of July, would have removed nearly $50 billion in medical debt from the credit scores of 15 million  

Queens, New York – July 14, 2025 – National nonprofit Undue Medical Debt’s president and CEO, Allison Sesso, shares the following statement following the ruling by Texas Eastern District Judge Sean Jordon to vacate the medical debt rule: 

“I am deeply saddened and disappointed by this decision. Medical debt is a crisis in this country with 100 million burdened by at least $220 billion in medical debt. Removing all medical debt from credit reports was a common sense policy that would have provided real relief, removing nearly $50 billion in medical debt from the credit scores of 15 million people. 

“The facts are clear: Medical debt is not predictive of creditworthiness. This decision will hurt people’s financial futures, including their ability to buy a home, care for their families, or even get a job — all because they got sick, injured or were born with a chronic condition through no fault of their own. It will also further decrease their willingness to get the care they need.  

“Our communities are stronger and healthier when everyone feels comfortable going to the doctor when they need to without fear of financial ruin. This policy enjoyed strong bipartisan support, which is why we are confident that states from across the political spectrum — many of which have already passed their own bans on including medical debt in credit scores — will continue to identify pathways  to protect their communities from the negative impacts of medical debt credit reporting. We encourage more states to take action — and Undue Medical Debt stands ready to continue chipping away at the burden of medical debt on those least able to pay across the country.” 

While many providers like hospitals do not report medical debts to the credit agencies, patients still fear this most common collection action, which prevents them from seeking needed care. 

• With the passing of the “One Big Beautiful Bill Act,” medical debt is slated to increase by $50 billion — a 15% increase — as an estimated 17 million people will lose access to health insurance like Medicaid and marketplace plans.   
• The confluence of these two policies will be disastrous for families across the country already struggling to make ends meet. There will not only be more medical debt, but also greater negative consequences to having it. 

Necessities like a home or a car should not be jeopardized by having a medical emergency. Take Scott Whitman, for example, a 35-year-old from Boca Raton who suddenly developed seizures after a high fever, and found himself in over $4,000 of medical debt. While he had been in the process of repaying his bills, he was only finally able to finance a car after Undue Medical Debt relieved much of his remaining medical debt, and his credit score jumped 25 points. He still lives at home with his parents because of the impact of medical debt on his credit report, although would like to be able to move out.  

In Le’Erin Watts’s case, the 40-year-old mother of two from Cincinnati found herself unable to close on her home because of a $75 medical bill she was unaware she was carrying — she quickly paid it. A few years later, a $1,400 overdue medical bill resulted in a sheriff showing up at her home, resulting in her establishing a payment plan. This embarrassing incident caused her to rethink her approach to medical care and now is proactive when anyone in her family needs it. This includes researching competing medications when prescribed to ensure getting the lowest priced one and working closely with doctors and her insurance company. 

Additional testimony from Undue constituents on the burden of medical debt reporting & benefits of its removal: 

• “My wife was diagnosed with MS 8 years ago, and she was a full-time [post-anesthesia care unit] nurse for 20 years. She had to go on disability after one year of no income [and] we only had my income to pay for the basic bills. Her treatments and hospitalizations put us in a bind, and even with Social Security, she was only getting a quarter of her previous income. Then came my medical issues requiring hospital stays, treatments, and multiple surgeries. We got far behind on our medical bills. This [debt relief] is a godsend and has helped increase our credit score, allowing us to get some long-overdue home repairs done.” — T.T., Ohio 
• “My medical bills from cancer treatment were astronomical and I have been buried under the debt since then. I have been slowly dragging myself out and recently tried to purchase another vehicle, but my credit score was JUST under the requirement to get the loan needed. Thanks to [this medical debt relief], my score raised just enough so I can finally get my family back into a vehicle.” — Matthew S., West Virginia 
• “I need[ed] this [medical debt] off my credit to help raise my credit score so I can become a first time home buyer. Life is rough! People get sick! At the time I wasn’t working and had no medical insurance I was at an all-time low. I’ve since got a good job and now my medical debt is gone?! What could be better!” Janetta Y., Illinois