The Medical Debt Forgiveness Act is a proposed legislation, as of January 2023, that aims to provide relief for individuals struggling with overwhelming medical debt. The bill would require credit reporting agencies to remove medical debt from credit reports once it has been paid or settled, and would also prevent the collection of medical debt that is more than two years old.
Medical Debt in the US
Medical debt is a significant issue in the United States, with one in four Americans reporting having trouble paying medical bills. This can lead to financial hardship and even bankruptcy. The Medical Debt Forgiveness Act aims to address this problem by providing a way for individuals to have their medical debt forgiven and removed from their credit reports.
Removes Medical Debt From Credit Reports
The bill would require credit reporting agencies to remove medical debt from credit reports once it has been paid or settled. This means that even if an individual is able to pay off their medical debt, it would no longer have a negative impact on their credit score. This would help those who have struggled with medical debt to improve their credit and access to credit in the future.
Prevents Medical Debt Collection
The Medical Debt Forgiveness Act would also prevent the collection of medical debt that is more than two years old. This means that collectors would no longer be able to contact individuals or take legal action to collect on medical debt that is more than two years old. This would provide relief for individuals who may have been pursued by collectors for medical debt they are no longer able to pay.
Halts Reporting Unpaid Medical Debt
This proposed legislation would also put a stop to the practice of reporting unpaid medical debt to credit reporting agencies before it has been verified as accurate. This would prevent situations where individuals may be reported as having unpaid medical debt when they are actually disputing the charges or are in the process of paying them off.
Medical Debt Disputing
The Medical Debt Forgiveness Act also includes provisions for individuals to dispute medical debt that is being reported to credit reporting agencies. This would allow individuals to have errors on their credit reports corrected, which can help improve their credit scores and access to credit.
The Act also includes a provision that would make it mandatory for healthcare providers and insurance companies to inform their patients about financial assistance programs that are available to them. This would help ensure that individuals who are struggling to pay their medical bills are aware of the options available to them and can take advantage of them.
The Medical Debt Forgiveness Act, if passed, would have a significant impact on the lives of individuals struggling with medical debt. It would provide relief from overwhelming debt and help improve credit scores, which can open up opportunities for individuals to access credit and achieve financial stability.
However, it’s important to note that the Medical Debt Forgiveness Act is still a proposed legislation and it has not yet been passed into law as of January 2023. It’s uncertain when or if it will be passed and implemented.