For 15 million people in the U.S., nearly $50 billion of medical debt will be erased from credit scores, raising them an estimated average of 20 points 

Queens, NY – January 7, 2025 – In a Fact Sheet released this morning, the White House announced a final rule to remove, and henceforth ban, medical debts from credit scores.  

This builds on earlier work from the White House and Consumer Financial Protection Bureau (CFPB) which in 2022 prompted the three major credit reporting agencies to remove paid medical debts from credit scores, give patients a year to pay debts before they could appear on credit scores and ban credit reporting on any medical debts under $500.  

Yet despite this progress, 15 million people were still burdened under unpayable medical debts, to the tune of $50 billion. These families were more likely to live in low-income communities in the South with an average medical debt balance of $3,100. Per Kaiser Family Foundation half of adults don’t have $500 for an emergency healthcare expense.  

Quick facts: 

• Medical debt is the leading cause of bankruptcies in the U.S. 

• Medical debts are a poor indicator of one’s creditworthiness 

• Individuals with debt are three times more likely to experience mental health burdens like anxiety or depression 

• Simply getting sick is a stronger predictor of medical debt than insurance status or poverty 

• Polling from Tulchin Research has found largely bipartisan support for policy fixes relative to medical debt and that 81% of respondents agree, “medical debt is different from other types of debt that people choose to take on because no one chooses to have an unexpected illness or injury” 

“With medical debts no longer negatively affecting credit scores, millions of families can breathe a little easier knowing that getting sick, being born with a chronic condition or experiencing an unexpected accident won’t ruin them financially,” shares Undue Medical Debt CEO and president Allison Sesso. “We know that many providers like hospitals have already stopped reporting medical debts to credit bureaus, nonetheless this a huge achievement to make substantive change in patients’ lives and further elevate the issue of medical debt on the national stage. Much more work remains to tackle this ongoing crisis, with at least $220 billion of medical debt weighing down families and nearly half of people saying they or a family member skipped necessary care for fear of the associated costs, but this is a huge step in the right direction.”  

The Fact Sheet also highlights Undue Medical Debt’s (Undue) work with over 20 governments around the country, from states to cities and counties. Many are leveraging American Rescue Plan Act funds made available by the federal government. In partnership, an estimated $1 billion in medical debt has been erased already for over 750,000 people in the U.S.  

North Carolina’s pioneering approach to tackling medical debt is also highlighted, combining medical debt relief with upstream, policy fixes in concert with providers like hospitals to ensure that future, unpayable medical debts are not created. Undue is partnering with the state to achieve its medical debt relief goals.