Polling on Medical Debt Illustrates the Challenges that Blocked Credit Reporting Rule Sought to Address

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Last week a federal judge blocked a recently finalized rule by the Consumer Financial Protection Bureau which would remove medical bills from credit reports. This decision has sparked widespread concern, as medical debt plays a crucial role in shaping individuals’ financial security and future planning.

A recent KFF Health Tracking Poll has found that about six in ten adults say they are worried about being able to afford the cost of health services (62%) or unexpected medical bills (61%) for themselves and their families – larger than the shares who report worrying about other expenses such as rent or mortgage, utilities, food, and transportation.

A few years ago KFF’s 2022 Health Care Debt Survey found that medical debt has long-term impacts on people’s finances. The project asked about different forms of debt individuals may have used to pay their medical and dental bills in order to provide a broader estimate of adults who currently have health care debt. Therefore, these estimates are different from CFPB definition of medical debt and notably not all would have benefitted from the recently blocked CFPB rule. 

Overall, about four in ten (41%) adults said they had some form of health care related debt as a result of medical and dental bills from care they or someone else in their family received, including one in four (26%) who said they had medical or dental bills that were past due or that they were unable to pay. Among these adults with health care debt, more than a third said their health care debt had negatively affected their credit score, rising to 46% of Black adults and 40% of adults who incurred debt when they were uninsured.

The impact of medical debt on credit scores often has a cascading effect. When asked about the effect of their credit scores being impacted by health care debt, adults with health care debt from KFF’s Health Care Debt Survey cited a range of negative outcomes from trouble qualifying for loans to homelessness. One 31-year-old woman from Arkansas with less than $10,000 of medical debt said the following: “My credit score is so low I can’t get financing for a vehicle causing me to lose my job due to lack of transportation.” Previous KFF Health News reporting has examined the negative ripple effects in-depth.

And health care debt doesn’t just impact those with long-term or chronic illnesses, many health-care related debts are caused by unforeseen illnesses and injuries. Among adults who had health care debt, about seven in ten (72%) said their health care debt was a result of bills for a one-time or short-term medical expense such as a single hospital stay or treatment for an accident. The idea that one unforeseen injury or illness can plunge someone into debt clearly contributes to public worries about unexpected medical bills and health care costs.

The recent decision, coupled with the newly enacted tax and budget legislation and the expiration of enhanced ACA premium tax credits, suggests that rising health care costs for millions of Americans could have long-lasting financial repercussions. Health care costs may therefore remain a top financial concern for the public for the foreseeable future, and if these increased costs are paid with debt, we may see a significant impact on consumer credits scores in the coming years.