The Consumer Financial Protection Bureau (CFPB) recently released a report shedding light on the current state of medical debt in America. As of June 2023, around 15 million Americans—approximately five percent of the population—still have delinquent medical bills on their credit reports. This statistic, while significant, marks a considerable improvement thanks to changes implemented by the credit reporting agencies. However, the report also highlights a concerning rise in the average balance of reported medical debt.
One of the key takeaways from the CFPB report is the reduction in the number of Americans with medical debt on their credit reports. This decline, amounting to approximately nine percentage points, can be attributed to recent policy changes by major credit reporting agencies. These changes, initiated in 2022, include removing medical collection debts that are less than $500 and those that have been paid off. The move was designed to alleviate the financial burden on consumers and improve their credit scores, recognizing that medical debt is often an unavoidable and non-predictive factor of creditworthiness.
Despite the positive trend in the number of individuals with medical debt, the report reveals a troubling increase in the average balance of reported medical debts. From an average of $2,000, the figure has surged to over $3,100. This increase suggests that while fewer people may be struggling with medical debt on their credit reports, those who are still dealing with it face significantly higher balances. This trend could be indicative of rising healthcare costs or more aggressive billing practices by medical providers and collection agencies.
The mixed results of the CFPB report underscore the ongoing challenges faced by consumers dealing with medical debt. On the one hand, the reduction in the number of people with medical debt on their credit reports is a welcome development. On the other hand, the rising average balances indicate that those still grappling with medical debt may find themselves in increasingly precarious financial situations.
From a legal perspective, these findings could influence future regulatory actions and reforms regarding credit reporting and collections for medical bills. Lawmakers and consumer advocates may push for further protections for individuals with medical debt, such as expanding the thresholds for debt removal or implementing stricter regulations on medical billing practices. Additionally, the healthcare and collections industry might face increased scrutiny regarding the cost and transparency of medical services and the pursuit of delinquent medical debts.
If you are a victim of debt collection harassment or credit reporting regarding medical debt, you should contact a Las Vegas Consumer Attorney to discuss your legal rights.