Pennsylvania Senator Argues for Including Medical Debt on Credit Reports

Advocate Andy

Toomey suggests medical debt matters in key lending decisions

Following an announcement by the three major credit bureaus - Equifax, Experian, and TransUnion - that most medical debt will be removed from consumer credit reports by this summer, Pennsylvania Senator Pat Toomey suggested the move was the result of undue political pressure from the Consumer Financial Protection Bureau (CFPB).

American Banker reports that Toomey made his concerns public at a meeting of the Senate Banking Committee this week:

Speaking during a Senate Banking Committee hearing on medical debt, Sen. Pat Toomey, R-Pa., blamed the Consumer Financial Protection Bureau for a recent decision by the three major credit bureaus — Equifax, Experian and Transunion — to no longer include nearly 70% of medical debt on consumer credit reports. Toomey, the committee's ranking Republican, argued that any action that limits lenders' access to consumer information could be harmful to the financial system.

Toomey's concern is that "risk" may not be accurately priced if most medical debt is excluded from credit reports.

In their announcement, the credit bureaus outlined these specifics of the plan to remove medical debt:

Effective July 1, 2022, paid medical collection debt will no longer be included on consumer credit reports. In addition, the time period before unpaid medical collection debt would appear on a consumer’s report will be increased from 6 months to one year, giving consumers more time to work with insurance and/or healthcare providers to address their debt before it is reported on their credit file. In the first half of 2023, Equifax, Experian and TransUnion will also no longer include medical collection debt under at least $500 on credit reports.

The move by the agencies comes following a CFPB report noting that Americans have $88 billion in medical debt on their credit reports:

Roughly 20% of U.S. households report that they have medical debt. The CFPB found that medical collections tradelines appear on 43 million credit reports. As of the second quarter of 2021, 58% of bills that are in collections and on people’s credit records are medical bills.

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Andy Spears is a middle Tennessee writer and policy advocate. He reports on news around public policy issues - education, health care, consumer protection, and more.

Nashville, TN
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