By NextBestFitBan medical debt from credit reports and limit collections
Remove medical debt from credit reports, cap interest, ban lawsuits, liens, and wage garnishment over medical bills, and require charity-care screening first.
Low cost; protects credit while old debt winds down.
Review ledgerHow this path connects
This path
Ban medical debt from credit reports and limit collections
Creates or worsens
Concrete changes if chosen
What would actually have to change in law, agencies, payment rules, or systems.
- Ban medical debt on credit reports nationally
- Cap interest on medical debt at 0–3%
- Ban lawsuits, liens, and wage garnishment for medical debt
- Require charity-care screening before collections
Effects
Each effect has its own page: the evidence, the case that it is or isn't a real cost, and whom it affects.
What it fixes
- Medical debt affects about 100 million people
Removing medical debt from credit reports and restricting interest and collections protects credit and housing at low cost. These protections do not stop new medical bills.
What it creates or worsens
- U.S. prices are far higher than in other countries
Limits on debt collection may reduce hospital collections and lead hospitals to raise other prices.
7 paths soften this
All-payer rate settingU.S. prices are far higher than in other countriesChosenCap commercial prices at a multiple of MedicareU.S. prices are far higher than in other countriesChosenRestore competition and leave prices to marketsU.S. prices are far higher than in other countriesRejectedGlobal budgets for hospitalsU.S. prices are far higher than in other countriesChosenFee-for-service at public fee scheduleU.S. prices are far higher than in other countriesChosenCapitation for primary care and integrated systemsU.S. prices are far higher than in other countriesChosenSingle public payer for everyoneTens of millions of people have no coverageChosen
Who's affected
Who gains
- Low- and middle-income households
- Medical debt affects about 100 million people: Medical debt leads them to skip care and face damaged credit and financial distress.
- People with ongoing or specialist care needs
- Medical debt affects about 100 million people: Medical debt leads them to skip care and face damaged credit and financial distress.
- Uninsured people
- Medical debt affects about 100 million people: Medical debt leads them to skip care and face damaged credit and financial distress.
- People with unaffordable deductibles or coinsurance
- Medical debt affects about 100 million people: Medical debt leads them to skip care and face damaged credit and financial distress.
- Hospitals and specialist groups with high private prices
- U.S. prices are far higher than in other countries: Providers with pricing power earn more per service.
- Drug and device makers
- U.S. prices are far higher than in other countries: U.S. prices are well above those in peer countries.
Who loses
- Medical debt collectors and buyers
- Medical debt affects about 100 million people: They collect or buy medical debt.
- Hospitals, clinics, and care organizations
- Medical debt affects about 100 million people: Hospitals sell medical debt or sue to collect it.
- People with employer coverage
- U.S. prices are far higher than in other countries: Private plans pay the highest prices, passed on through premiums.
- Taxpayers and public budgets
- U.S. prices are far higher than in other countries: Public programs pay more than peer countries too.
Where it has been tried
- Colorado, New York, other states: State laws banning medical debt from credit reports and limiting collections.
- United States: After 2023 credit-report changes, consumers whose largest medical collection was just below $500 saw credit scores rise about 20 points more than those just above it.