CFPB Finds 15 Million Americans Have Medical Bills on Their Credit Reports

WASHINGTON, D.C. - The Consumer Financial Protection Bureau (CFPB) today released research showing that 15 million Americans still have medical bills on their credit reports despite changes by Equifax, Experian, and TransUnion. The 15 million Americans disproportionately live in the South and low-income communities. Collectively, they have more than $49 billion in outstanding medical bills in collections. This is the CFPB's second analysis of the changes made by the three national credit reporting companies to reduce the number of medical bills on credit reports. Today's report follows the start of a CFPB rulemaking that will consider options to restrict the reporting of allegedly unpaid medical bills on credit reports.

"Experian, Equifax, and TransUnion took steps to remove many medical bills in part because of the recognition that they hold little predictive value," said CFPB Director Rohit Chopra. "Findings from our latest research reveal the impact of these changes and the need for further reforms."

In early March 2022, a CFPB study found an estimated $88 billion in medical bills on Americans' credit reports. Following that study, the three nationwide credit reporting companies - Equifax, Experian, and TransUnion - announced they would no longer report certain medical bills in collections. The companies announced they would increase the time before medical bills in collections can appear on credit reports - from 180 days to one year. Second, the companies would stop reporting medical bills that had been in collections but were resolved. Third, the companies would remove medical bills below $500 from credit reports.

Today's research found the number of people with medical bills in collections on their credit reports has declined. As of June 2023, about 5% of Americans had unpaid medical bills on their credit reports - down from 14% in March 2022. Older Americans saw the largest improvement - 8.4% of older Americans had medical bills on their credit reports in March 2022 compared to below 3% in June 2023.

For the 15 million Americans with medical bills on their credit reports, today's research finds:

• Many live in low-income communities and the southern United States: The credit reporting changes were slightly less likely to help Americans in lower-income communities compared to those in higher-income communities. The changes did not do as much for individuals residing in the South. On average, people living in the South continue to have the most medical bills in collections and for the largest dollar amounts.
• The average medical balance on credit reports increased from $2,000 to over $3,100: The credit reporting changes primarily removed smaller balances. As a result, the average balance of the remaining reported medical bills increased.
• Most medical collections balances stayed on credit reports: The three national credit reporting companies removed many bills, and many people now have no remaining medical bills on their credit reports. However, a majority of medical collections balances remain on credit reports.

The CFPB will continue to prioritize fixing the credit reporting market, including issues that involve the reporting of medical bills. In addition to the September 2023 announced rulemaking to address medical bills on credit reports, the CFPB launched an inquiry into costly credit cards and loans that are pushed onto patients to pay for health care costs. The CFPB also took action against illegal nursing home debt collection practices, as well as against medical debt collection and credit reporting practices that violate the No Surprises Act.

The CFPB has taken actions against entities engaged in illegal medical debt collection practices. The CFPB shut down Commonwealth Financial Systems for illegal medical debt collection practices. The CFPB also ordered Phoenix Financial Services to pay millions in redress and penalties for attempting to collect disputed medical debts through unlawful collection letters and misrepresentations.

Read the report, Recent Changes in Medical Collections on Consumer Credit Records.

Read more about the CFPB's work on medical debt.

Read consumer complaints about medical bills and medical collections.

Consumers can submit complaints about medical billing and collections issues, as well as about other financial products and services, by visiting the CFPB's website or by calling (855) 411-CFPB (2372).

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