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Medical debt is a growing burden for many Americans, with an estimated 35 million people struggling to pay their medical bills. The COVID-19 pandemic has only made matters worse, with millions of people losing their jobs and health insurance. To address this issue, the Medical Debt Relief Act of 2021 has been introduced to the United States Congress. In this article, we will take a closer look at what the act entails, its potential benefits, and how it may affect those with medical debt.
What is the Medical Debt Relief Act?
The Medical Debt Relief Act is a bill introduced by Senator Jeff Merkley (D-OR) and Representative Ilhan Omar (D-MN) in the Senate and House, respectively. The purpose of the bill is to provide consumers with relief from medical debt by prohibiting credit reporting agencies from reporting medical debts for one year after they are incurred. The act also requires the removal of medical debts from credit reports within 45 days of being paid or settled.
The bill is designed to provide relief to those who are struggling with medical debt and may not have the resources to pay it off. By prohibiting credit reporting agencies from reporting medical debts, the bill may reduce the negative impact on credit scores for many Americans, making it easier for them to access credit in the future.
Potential Benefits of the Medical Debt Relief Act
The Medical Debt Relief Act has the potential to alleviate the financial burden on many Americans who are struggling with medical debt. According to a study by the Consumer Financial Protection Bureau, medical debts are the largest source of unpaid bills that appear on credit reports.
By prohibiting credit reporting agencies from reporting medical debts for one year after they are incurred, the bill may provide consumers with more time to pay off their medical bills before they negatively impact their credit score. This will also allow individuals to work with their healthcare providers to negotiate payment plans or dispute any fraudulent charges.
Additionally, the act requires the removal of medical debts from credit reports within 45 days of being paid or settled. This provision will help those who have paid off their debt to have it removed from their credit report in a timely manner. The removal of medical debts from credit reports can improve a consumer’s credit score and make it easier to access credit in the future.
How the Medical Debt Relief Act May Affect Those With Medical Debt
The Medical Debt Relief Act may have a significant impact on those who are struggling with medical debt. By prohibiting credit reporting agencies from reporting medical debts, the bill may prevent medical debts from negatively impacting credit scores, which may improve the ability to obtain affordable credit in the future.
Additionally, the removal of medical debt from credit reports may also help to improve credit scores, making it easier for individuals to obtain credit at favorable interest rates. This could be particularly beneficial for those who have experienced financial hardships due to the COVID-19 pandemic or other unforeseen circumstances.
However, while the act has the potential to provide relief for those with medical debt, it is important to note that it does not address the underlying issue of high healthcare costs. The bill does not address the root causes of medical debt, such as the high cost of healthcare services, or address the need for healthcare reform.
FAQs:
Q: Who is eligible for relief under the Medical Debt Relief Act?
A: The Medical Debt Relief Act does not specify any eligibility requirements for relief. Any individual with medical debt may benefit from the act’s provisions.
Q: Will the Medical Debt Relief Act eliminate medical debt?
A: No, the Medical Debt Relief Act does not eliminate medical debt. It prohibits credit reporting agencies from reporting medical debt for one year and requires the removal of medical debts from credit reports within 45 days of being paid or settled.
Q: When will the Medical Debt Relief Act take effect?
A: The Medical Debt Relief Act has not yet been signed into law. It has been introduced in both the Senate and House and is awaiting further action.
Q: Will the Medical Debt Relief Act affect my credit score?
A: The Medical Debt Relief Act may positively affect your credit score by preventing medical debts from negatively impacting it and by requiring the removal of medical debts from credit reports within 45 days of being paid or settled.
Conclusion:
The Medical Debt Relief Act has the potential to provide much-needed relief to millions of Americans struggling with medical debt. Its provisions prohibiting credit reporting agencies from reporting medical debt for one year and requiring the removal of medical debt from credit reports within 45 days of payment or settlement may improve credit scores and make it easier to access credit in the future. However, the act does not address the underlying issue of high healthcare costs, which may continue to contribute to medical debt. Overall, while the Medical Debt Relief Act may provide temporary relief, additional measures will be needed to address the root cause of medical debt in the United States.
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Article Summary:
The Medical Debt Relief Act has been introduced to the United States Congress to address the growing burden of medical debt on millions of Americans. The bill aims to provide relief to those struggling with medical debt by prohibiting credit reporting agencies from reporting medical debts for one year after they are incurred and requiring the removal of medical debts from credit reports within 45 days of being paid or settled. While the bill may benefit those with medical debt by improving their credit scores and making it easier to access credit, it does not address the underlying issue of high healthcare costs.
