NY.- The Biden administration proposed this Tuesday to eliminate medical debts from the credit reports of more than 15 million Americans, which makes it easier to qualify for loans for cars, housing and small businesses.
The proposed rule, which will be subject to a public comment period, will not take effect immediately.
That could prohibit health providers from sharing medical debts with lending institutions and prohibit those providers from using the information when it comes to granting credit.
Vice President Kamala Harris said the measure will improve “the financial health and well-being of millions of Americans.”
“One of the most significant consequences of showing medical debt is damaging a person’s credit rating,” Harris said.
“Medical debt makes it harder for millions of Americans to get approved for a car, home or small business loan, and that’s just not fair.”
Medical debt usually weighs heavily on Americans’ lives, with some 20 million people owing more than $250 to health care providers.
Americans who are African American and Latino are the most likely to report significant debt, and are those who are low-income or underinsured.
In surveys, Americans have said that to get credit they have to work overtime to cover those debts.
As the economy and inflation have discouraged those who voted for President Biden in his first term, his administration’s efforts to limit costs have become a central part of his re-election campaign.
His advisers believe that measures such as reducing the prices of prescription drugs such as insulin or inhalers are already being perceived by voters and will improve the perception of Biden’s domestic agenda.
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