Recapping Yesterday’s Senate Hearing on Medical Debt As Dems Call on CFPB to Do More

There was at least one voice of reason that sat before the Senate Banking Committee yesterday during a hearing that was held on the “Economic Impact of the Growing Burden of Medical Debt,” even as Democrats on the committee called on the Consumer Financial Protection Bureau to do more to help consumers saddled with unpaid healthcare bills.

Rather than treat the symptoms — unpaid debts that end of up in collections — solutions being considered by Congress should seek to treat the underlying disease — how much healthcare costs in the United States — Prof. David Hyman from Georgetown University said during the hearing. “Attempting to solve the problem of medical debt with tweaks to the credit reporting system is the equivalent of treating a symptom instead of the underlying disease,” Prof. Hyman said during the hearing.

Sen. Pat Toomey [R-Penn.], the leading Republican on the committee, shared concerns about the unintended consequences that may result from blocking certain types of medical debts from being reported on consumers’ credit reports, while also positing whether the medical debt burdens being faced by consumers is “growing.”

“What appears to have occurred here was that a political campaign, which included the CFPB, bullied lenders and credit rating agencies into removing this information,” Sen. Toomey said. “This kind of misuse of power by the administrative state has grown all too common. And it’s an example of how Congress has become far too comfortable with the executive branch seizing the Article I lawmaking authority. We need to be very careful that any actions considered to address symptoms — in this case debt from a health condition — don’t make matters worse. This new credit reporting agency policy doesn’t actually lower the cost of medical care. In fact, it will either raise costs or reduce access.”

Meanwhile, on Monday, the day before the hearing, Sen. Sherrod Brown [D-Ohio], the chair of the Senate Banking Committee, along with Sen. Elizabeth Warren [D-Mass.] and other Democrats from the Committee, called on the CFPB to create a new position at the regulator for a medical debt ombudsman. “This position could help to facilitate consumer complaint resolution and compliance with federal directives, like the recently implemented federal ban on surprise medical bills,” they wrote. “An ombudsman can also monitor the changes announced earlier this month by Equifax, Experian, and Transunion, to ensure that the proposed change to medical debt credit reporting are uniformly and universally implemented.”

The letter also asked the CFPB to research the size of the market for medical debts that are sold, “including information on the number and size of the debt buyers and the health entities most likely to sell medical debt.”

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