The Biden administration intends to propose a rule that will scrub medical debt from credit reports.

Kamala Harris and Consumer Financial Protection Bureau Director Rohit Chopra will announce the rule.

WATCH:

Per ABC News:

The rule, which has been in the works since September, could go into effect sometime next year, Chopra told ABC News in an exclusive interview ahead of the policy announcement.

“Our research shows that medical bills on your credit report aren’t even predictive of whether you’ll repay another type of loan. That means people’s credit scores are being unjustly and inappropriately harmed by this practice,” Chopra said.

CFPB’s research estimates that the new rule would allow 22,000 more people to get approved for safe mortgages each year — meaning lenders could also benefit from the positive impact on peoples’ credit scores, by being able to approve more borrowers.

Some major credit report companies have already stopped using medical debt to calculate peoples’ credit worthiness, including Equifax, TransUnion and Experian. FICO and VantageScore also recently started factoring medical debt less heavily into their scores.

But 15 million Americans still have $49 billion of medical debt that is hampering their scores, the CFPB found. This rule would extend the practice to all credit reporting in the U.S.

“Biden has previously been accused of attempting to ‘buy’ votes with debt forgiveness measures such as his student loan relief plan,” Daily Mail noted.

“We have forgiven $167B in student loan debt for more than 4.7M people, and our Administration is on track to ensure that medical debt will no longer be used in calculating your credit score,” Harris said.

WATCH:

Per Daily Mail:

Some experts have welcomed the rule change, pointing out that medical debt collection is already normally unsuccessful.

Estimates suggest that only 24.5 percent of attempts to collect unpaid medical debt are successful.

But others warned it could lead to more Americans paying off medical bills, which could lead to hospitals demanding upfront payments for care.

Dr Ge Bai, an accounting health policy expert at Johns Hopkins University in Maryland, made the warning — saying the move could leave low income patients worse off.

‘I think in the short run, it will be great news for patients, and probably we’ll see advocacy groups pushing it,’ she said.

‘However, I think in the long-run, when the long-term negative effects emerge, probably we’re going to see more pushback.’

This is already happening in some areas, including Florida, where some hospitals are refusing to carry out surgeries without receiving payment first.

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