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medical debt
Trump CFPB Moves to Bar States From Wiping Medical Debt Off Credit Reports
One consumer advocate said the effort adds "salt to the wound" as tens of millions of people face healthcare premium spikes that are likely to worsen the nation's medical debt crisis.
Oct 28, 2025
The Trump administration is moving to undercut state-level efforts to wipe medical debt from Americans' credit reports, just as millions across the country are facing massive healthcare premium increases stemming from congressional Republicans' refusal to extend Affordable Care Act subsidies.
On Tuesday, according to reporting by The Lever and Bloomberg Law, the Russell Vought-led Consumer Financial Protection Bureau (CFPB) will publish a nonbinding interpretive rule arguing that federal statute "generally preempts state laws that touch on areas of credit reporting."
The guidance aligns with views expressed by a Trump-appointed federal judge in Texas who, earlier this year, vacated a Biden-era CFPB rule that would have prohibited the inclusion of medical debt on consumer credit reports. The Trump administration, which has repeatedly violated court orders, is complying with the decision.
Medical debt is a growing crisis in the United States: Roughly 14 million adults owe more than $1,000 in medical debt, and an estimated 20% of Americans have medical debt on their credit reports.
Supporters of removing medical debt from credit reports argue it is not a reliable measure of creditworthiness. The Center for Consumer Law & Economic Justice at UC Berkeley notes that "medical debt often reflects the simple misfortune of getting sick unexpectedly and having to face a medical system that is rife with insurance stonewalling, delay, and mistakes."
More than a dozen states—including California, Colorado, and New York—have moved to curb the reporting of medical debt, which accounts for a significant percentage of personal bankruptcies in the US.
The Lever reported that the Trump administration's position that federal law overrides state laws is being echoed "by industry groups to advance their ongoing litigation to overturn the 15 state laws."
"For example," the outlet observed, "the Consumer Data Industry Association, which represents credit reporting companies like Equifax, Experian, and TransUnion, is likewise arguing that federal laws void state-level regulations of their conduct as part of their effort to block Maine's medical debt law."
Chi Chi Wu, an attorney at the National Consumer Law Center, told Bloomberg Law that the Trump CFPB's assault on efforts to remove medical debt from credit reports adds "salt to the wound" as tens of millions of people face surging healthcare premiums.
Writing for MSNBC over the weekend, Century Foundation president Julie Margetta Morgan warned that "the spike in premiums won't just blow an even bigger hole in families' future budgets."
"It will pour gasoline on the already raging fire of medical debt in this country," she added, "and government leaders at all levels are not prepared for it."
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The Answer to Medicaid Cuts Should Be Medicare For All
Medicare For All is broadly popular, supported by the majority of the population, and affects everyone in the country. So what are we waiting for?
Jul 27, 2025
Following the recent passage of U.S. President Donald Trump’s domestic policy agenda, there’s been a lot of discussion about how the bill will affect average Americans. One provision which has received a lot of attention in particular has been the proposed cuts to Medicaid.
Medicaid represents a crucial stopgap for working Americans, one of the few things keeping our healthcare system afloat as costs have skyrocketed. Cuts to the program could have devastating effects. For instance, many of the country’s rural hospitals (as well as nursing homes and community health clinics) rely heavily on Medicaid payments and could be forced to shut their doors without them. It’s estimated this could lead to thousands of deaths.
The Democratic Party has yet to come up with a viable alternative to this. Fortunately, there’s a solution. And it happens to be supported by the majority of Americans—embrace Medicare For All.
America is the only country in the developed world without a universal healthcare system. Our current model for care is bloated, wasteful, inhumane, and driven by corporate greed. According to a 2024 report by the Commonwealth Fund, the U.S. ranked last when compared with 10 other wealthy, industrialized nations on metrics such as life expectancy, preventable deaths, and access to care, despite spending by far the most on healthcare.
It’s essential that we transition to a system that prioritizes patient care over profit.
There are several reasons why America’s system is so expensive (high administrative costs, the government’s inability to negotiate drug prices), but one crucial reason is that we’ve opted for a patchwork system. America has four models for healthcare—one system for the workforce, one system for people over 65, one system for veterans, and no system at all for the roughly 8% of the country that remains uninsured.
Pretty much every other country has settled on one model for everyone, because it’s cheaper and less convoluted. That’s the sensible way of doing things. In 2020, a comparative analysis of 22 separate studies found that Medicare For All would save billions, if not trillions of dollars, for Americans.
Medicare For All is broadly popular, supported by the majority of the population, and affects everyone in the country. We know that it works and would do an enormous amount to relieve people’s financial burdens. The top cause of bankruptcy in America is medical debt. This program would also save tens of thousands of lives every year. If it were to pass, it might secure a voting base for the Democratic Party for at least a generation, the way Social Security and the original Medicare bill did.
It’s essential that we transition to a system that prioritizes patient care over profit. We must follow the example of every other developed country and guarantee healthcare coverage to all our citizens as a basic human right.
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Trump-Appointed Judge Strikes Down CFPB Rule That Would Bar Medical Debt From Credit Reports
"This decision will hurt people's financial futures, including their ability to buy a home, care for their families, or even get a job," said the president and CEO of the nonprofit Undue Medical Debt.
Jul 15, 2025
A Trump-appointed judge axed a Biden-era rule on Friday that would have removed medical debt from credit reports and barred lenders from using certain medical information in loan decisions.
The rule, enacted under the authority of the Fair Credit Reporting Act, would have removed an estimated $49 billion in medical bills from the credit reports of about 15 million people.
But after a lawsuit brought by two industry groups with the support of Republicans in Congress who attempted to block it, Judge Sean Jordan of the U.S. District Court of Texas' Eastern District ruled that the Consumer Financial Protection Bureau (CFPB) had exceeded its authority in introducing the rule.
According to the CFPB, those with medical debt on their credit reports would have received a 20-point boost to their credit scores on average as a result of the rule. It would have led to an estimated 22,000 more mortgages being approved for people struggling with medical debt.
According to a report by the Peterson Center on Healthcare and KFF last year, roughly 1 in 12 adults has over $250 in unpaid medical debt.
"People who get sick shouldn't have their financial future upended," said CFPB Director Rohit Chopra at the time of the rule's passage in January 2025. "The CFPB's final rule will close a special carveout that has allowed debt collectors to abuse the credit reporting system to coerce people into paying medical bills they may not even owe."
The consumer reports industry lobbied furiously against the measure. Two industry groups—the Consumer Data Industry Association and the Cornerstone Credit Union League—brought the lawsuit before Judge Jordan. Meanwhile, reporting from Accountable.US in March revealed that Republicans on the House Financial Services Committee accepted a combined $867,000 from trade groups opposed to the rule.
Using the same talking points as the industry, they then attempted to block the rule, arguing that it would "weaken the accuracy and completeness of consumer credit reports."
However, according to research by the CFPB, medical debt on credit reports often has no bearing on a person's ability to pay back other loans.
Medical bills also frequently contain mistakes. According to a survey by the Commonwealth Fund last year, more than 45% of respondents were billed for a service they thought was covered by insurance. The trade magazine Becker’s Hospital Review, meanwhile, has estimated that 80% of medical bills contain errors that inflate costs.
"Medical debt unjustly damages the credit scores of millions, limiting their ability to obtain affordable credit, rent safe housing, or even get a job," said the National Consumer Law Center after the rule was introduced.
Now, as a result of its being struck down, the 15 million Americans who have medical debt on their credit reports will see an average of $3,200 remaining on their reports that would have otherwise been erased.
"The facts are clear: Medical debt is not predictive of creditworthiness," said Allison Sesso, the president and CEO of the nonprofit Undue Medical Debt, on Monday. "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."
The ruling also marks the latest attack by Republicans on the CFPB. In February, the Trump administration attempted to unilaterally and illegally shut down the consumer watchdog agency. His effort to dismantle it was later blocked by a federal judge.
Since its creation in 2011, the CFPB has relieved $21 billion worth of debt for nearly 200 million Americans. It recouped that money from powerful financial institutions and credit card companies that had engaged in predatory practices and saddled Americans with junk fees.
But by cracking down on corporate abuses, it became the bane of Republican lawmakers and their corporate donors. Many top Trump donors sought to kill the CFPB because it was coming after the actions of their companies.
Elon Musk's company Tesla was facing scrutiny over its auto loan policies, which had received hundreds of complaints from customers. His social media company, X, was also being examined for its payment policies.
Another top Trump donor, investor Marc Andreesen, launched a broadside against the bureau when it ordered a payday lending company he'd invested in to pay tens of millions worth of fines for engaging in predatory lending.
"Judge Sean Jordan, a Trump-appointed judge, joined congressional Republicans in making it easier for the Trump administration to raise costs on millions of Americans," said Accountable.US executive director Tony Carrk.
"Not only are they dismantling healthcare for 17 million through their big, ugly betrayal, but they're dooming millions more with low credit scores due to illness and injury," he continued. "Republicans are holding a grudge against the CFPB, and it's costing Americans money."
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