By Doug Aldeen
The Biden Administration provided in a recent press release that the CFPB or the aptly titled “Consumer Financial Protection Bureau” is finalizing a rule to remove all medical debt from consumer credit reports AND to prohibit unpaid medical bills from preventing access to credit. The devil is always in the details:
Market implications depending upon the parameters of the rule:
1. How much credit, what level of income, and what type of loans will be subject to this rule and who will establish the applicable standards?;
2. Depending upon the answer to the above, those eligible individuals will really have no reason to need an insurance network. If the ability to impair credit for an unpaid medical bill is fully removed from the equation, the provider’s only option is to sue and recover the reasonable value of medical services. The local judge, “The Honorable Billy Bob Joe” will determine fair market value. Probably not the best option for the provider… .;
3. Any attempt to circumnavigate this by demanding cash upfront WITHOUT FIRST DETERMININIG ELIGIBILITY under the applicable financial assistance policy violates IRC 501r;
4. In short, without the ability to impair credit for an unpaid medical bill coupled with a financial assistance policy at 400% of the FPL will almost assure universal health care because 84% of the US population is at or below 400% of the FPL;
5. Vinny and Guido need to find another collection agency to operate.
This one sentence in the Biden administration’s final rule removing medical debt from all credit reports is all you need to know:
“Under the CFPB rule, there will be zero Americans with medical debt listed on their credit reports, down from 46 million in 2020”
RELATED BLOG POSTING: CFPB Finalizes Rule to Remove Medical Bills from Credit Reports
