New rule could forgive medical debt for millions in U.S.

New rule could forgive medical debt for millions of Americans

A new rule proposed by the Biden Administration could wipe medical debt off most credit reports.

About half of all Americans think it's important for the government to provide some sort of medical debt relief.

The Consumer Financial Protection Bureau says most consumers can’t control their medical debt, an alarming statistic given that nearly one in five U.S. citizens have some form of medical debt.

Take a look at cancer survivors for example: the American Cancer Society Cancer Action Network says almost half of all cancer patients and survivors have debt, despite nearly all of them being insured. That poll was conducted in part by the University of Chicago and the Associated Press.

This comes as the Biden Administration proposed a new rule that would wipe medical debt off most credit reports.

It would prevent debt collectors from using the reporting system to get people to pay, and increase the number of loan approvals.

According to government data, America owes about $220 billion dollars in medical debt. Around 14 million people owe more than $1,000, and 3 million people owe more than $10,000. It also shows that Black and Hispanic households carry more debt.

The forgiveness is particularly favored in cases where a patient experienced health care fraud, or the patient was wrongfully billed. Other cases include if a patient has made on-time payments on an existing medical loan for 20 years, or their debt is big compared to their income.

In Washington, most hospitals get significant tax breaks with the expectation they'll provide critical care to anyone who needs it. That means if you fall under a certain income, you could get some help with your medical bills.

You can check your eligibility at the Office of the Attorney General’s website.