Two letters keep coming to you
from the hospital about the balance
you owe. Well, this week, the Biden
administration announced unpaid
medical bills will no longer appear
on credit reports.
Removing $49 billion
in such debt from the credit reports
of 15 million Americans
and nearly 400,000
people In Wisconsin,
medical debt lowers credit ratings,
preventing people from getting
loans, renting apartments, even
getting a job.
Here with his reaction, attorney
Bobby Peterson from ABC
Four Health, a nonprofit public
interest law firm in Madison.
And, Bobby, thanks for being here.
Thanks for inviting me.
Appreciate it.
So so when you heard about this,
what was your reaction?
I thought it was great.
I think, you know, getting
medical debt off of people's credit
report is a real positive
move in the right direction.
You know, a lot of times people
don't choose to get ill or a
sickness or working with a
family member that has big bills
because of an illness or a sickness.
And to have that compromise,
your credit report, I think, is
just in the wrong direction.
It's not a good indicator of credit
worthiness oftentimes.
So removing it, I think, is
definitely a move in the right
direction.
You called the current system an
electronic debtors prison.
How so?
Well, if you think about it, you
know, in the old days, they
would you know, you didn't pay your
bills. They locked up and threw in
prison until you paid your bills.
Today, it's a situation
where you have electronic
handcuffs on an electronic debtors
prison. That's your credit score.
If your credit score doesn't meet
the certain metrics that people
want. You can't get a car, you can't
get apartment. You can't get a job
sometimes.
And so it really is an electronic
debtors prison that traps people,
sometimes in poverty
by eliminating medical debt from
this equation.
I think it can lift a lot more
people out of
this electronic debtor's prison and
give them an opportunity to move
forward to get credit, apartment
jobs, things like that.
I mean, the estimates are that
people's, by removing medical
debt from their credit scores, could
raise their credit score by up to 20
points.
So what incentive, though, remains
for getting people to pay their
medical bills?
Well, I mean, I think that, you
know, part of the issue with medical
bills is that we have
such a confusing, complicated
system that trying to understand
it and figure it out at the front
is extraordinarily difficult for
most consumers, particularly
if you're sick, if you're
helping a family member trying to
work through that.
It's impossible.
What a lot of people don't
understand is that those decision
makers are saying no to coverage.
That usually result in bills
that aren't paid.
And so when those bills don't get
paid, it's a cost for all
of us.
We've talked before about, you know,
the hospital association does an
annual uncompensated care report
in Wisconsin.
That uncompensated care report was
about $1.4 billion
in 2023.
That's money that just isn't getting
paid.
We also know that that medical
billing and medical
debt, something there's so many
mistakes made in the process
that people are billed
inappropriately.
So, again, it's not a good measure
sometimes of someone's credit
worthiness because errors,
mistakes.
Our solution to this is to really
work at the front end of the
process, try and help people avoid
that medical debt before it becomes
a bill.
Streamline the system and simplify
the system a little bit more.
In your experience with
clients.
How does the debt mostly
accrue and mostly for
whom?
For a lot of people that have
ongoing chronic medical conditions.
People that have children with
special health care needs,
adults with disabilities, because
they are high users of the system,
they end up getting in those
those more encounters that result in
more bills and medical
debt. And, you know, it's not just
hospital debt, it's prescription
drug debt.
It's going to physicians.
It's going to physician groups,
dental bills, all of that
accumulates.
And it just becomes a lot for
people to try and deal with and try
and work through.
So this is a Biden rule.
How likely might it be that
it's overturned by the incoming
administration?
I'd say there's a good chance that
it might get overturned.
There's also litigation that's
going on right now was filed the day
after the rule was published.
And the rule doesn't take effect
until 60 days after publication.
So the rule was published on Monday.
60 days later, the rule will take
effect.
A lawsuit was filed in Texas.
So we've seen this before.
So a little bit of venue shopping
there to find a judge that might be
likely to overturn it.
We don't know that that's going to
happen, but we suspect that was
part of the strategy.
We also know that the Congressional
Review Act gives Congress an
opportunity. Entity to review these
administrative rules within 60 days
to be able to overturn them, it
has to be approved by the House, the
Senate, and signed by the president.
There's very narrow margins.
So, you know, medical debt is one
of those issues that does have some
bipartisan appeal.
So maybe it'll make it through.
But I'm not I'm not super optimistic
about that.
All right. Well, Bobby Peterson,
thanks very much.
You're welcome.
Thank you, sir.
You're welcome.
All right. Have a good weekend.
All right. You, too.
Take care.
Bye bye.