WASHINGTON – Advocates at the National Consumer Law Center (NCLC) applaud a series of actions announced today by the Biden-Harris Administration to provide debt relief to struggling consumers and to address illegal debt collection. The measures taken by the Consumer Financial Protection Bureau (CFPB), Department of Defense (DOD), and Department of Health and Human Service (HHS) will help increase medical debt relief and improve the Administration’s understanding of the impacts of medical debt on older adults.
The actions address several important areas:
Guidance to Debt Collectors
“Today’s CFPB advisory opinion cracks down on abusive practices in the collection of medical debt,” said April Kuehnhoff, senior attorney, noting that the CFPB highlighted many of these abuses in 2023 and 2024 reports on the debt collection industry. “The CFPB’s guidance reminds debt collectors of their strict liability under the Fair Debt Collection Practices Act (FDCPA) if they collect on amounts not owed, for services not received, or they lack documentation of the alleged debt. It also clarifies when a debt is ‘in default’ in order to address efforts by some medical debt collectors to avoid FDCPA liability.”
Access to Financial Assistance
“We appreciate the CFPB’s continued focus on charity care or hospital financial assistance issues, including today’s blog post,” said Berneta Haynes, senior attorney. “Many patients eligible for financial assistance often don’t receive it, leaving them strapped with unaffordable medical bills and facing aggressive debt collection. This especially impacts Black patients, exacerbating the racial wealth gap. We need significant improvements to federal charity care requirements to make sure no patients fall through the gaps.”
Advice to Consumers on Medical Debt Collections
“We’re glad to see that the CFPB also issued advice to consumers about how to respond to medical debt collectors,” said Jenifer Bosco, senior attorney. “This consumer advice follows recent research highlighting the importance of challenging medical bills when you disagree with them.”
Helping Consumers with Medical Debt from Department of Defense Facilities
“Thousands of people have their tax refunds seized, wages garnished, and a portion of their federal benefits taken to pay off medical debt that arose when they received trauma care at a Department of Defense hospital,” said Kyra Taylor, staff attorney. “These people often had no choice because they were taken to these facilities after a car or work accident. Ironically, they might have been eligible for financial assistance at any nonprofit hospital. I’m relieved to see that the Department of Defense is taking the first step to implement financial assistance programs to ensure that un- or under-insured individuals aren’t doomed to a cycle of poverty because the government provided their medical care.”
Assessing the Impact of Medical Debt on Older Adults
“We commend the White House for prioritizing efforts to survey and research the extent and nature of medical debt affecting older adults,” said Anna Anderson, staff attorney. ”Millions of older adults struggle with medical debt, which not only impacts their financial security but also negatively affects their health, as they are more likely to skip critical medical care or prescription refills to avoid incurring further medical debt. Older adults may turn to risky medical credit cards to cover their necessary care. They may also be more likely to experience medical billing errors.”
“We also appreciate efforts to address illegal and abusive collection of medical and nursing home debt from surviving spouses, children, and other family and friends, who may face illegal collection actions due to their older loved ones’ medical and nursing home bills,” Anderson added.
Related Resources
- Surviving Debt: The updated 2024 edition of Surviving Debt is available for free on NCLC’s Digital Library and provides precise, practical, and hard-hitting advice from the nation’s consumer law experts on how to deal with crushing debt affecting millions of Americans.
- Press Release: 100+ Groups Support the CFPB’s Removal of Medical Debt From Credit Reports, Aug. 12, 2024
- Model Medical Debt Protection Act, Mar. 6, 2024
- Report: FAQs: Can a Nursing Home Force a Resident’s Family and Friends to Pay the Bill?, Sep. 7, 2023
- Report: Health Care Plastic: The Risks of Medical Credit Cards, Apr. 27, 2023
- Report: Don’t Add Further Insult to Injury: Medical Debt & Credit Reports, Jan. 6, 2023
- Report: The Racial Health and Wealth Gap: Impact of Medical Debt on Black Families, Mar. 9, 2022
- Letter to Rohit Chopra Regarding Additional Actions the CFPB Should Take to Protect Consumers with Medical Debt, Mar. 22, 2022
###Since 1969, the nonprofit National Consumer Law Center® (NCLC®) has worked for consumer justice and economic security for low-income and other disadvantaged people in the U.S. through its expertise in policy analysis and advocacy, publications, litigation, expert witness services, and training.
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