FEDERAL JUDGE REVERSES MEDICAL DEBT RULE

How 15 Million Americans Just Lost Credit Score Protections

Breaking down the court decision that blocked medical debt removal from credit reports

BREAKING

JUDICIAL RULING BLOCKS MEDICAL DEBT PROTECTIONS

A federal judge has reversed the landmark rule that would have removed medical debt from all consumer credit reports nationwide.

"This ruling represents a devastating setback for the 15 million Americans who stood to gain an average 20-point credit score increase," said financial advocate Rebecca Jones. "Medical debt is fundamentally different from other debts - it's not a choice, but a necessity." [1,5](@ref)

The blocked rule, announced by Vice President Kamala Harris in January 2025, would have prohibited credit agencies from including medical debt in credit reports and barred creditors from using medical bills in lending decisions. [1](@ref)

WHO THIS RULING AFFECTS

15 MILLION+

Americans with medical debt on credit reports

Credit Score Impact

Would have raised scores by ~20 points on average [1](@ref)

$220 BILLION

In collective medical debt nationwide

Bankruptcy Cause

Medical debt remains the leading cause of bankruptcies [2,4](@ref)

40% OF ADULTS

Carry medical debt affecting financial decisions

Loan Applications

Medical debt makes securing loans more difficult [4,6](@ref)

DISPROPORTIONATE IMPACT ON VULNERABLE GROUPS

2X
Higher medical debt burden for Black Americans vs other groups [1](@ref)
27%
Black women delaying care due to debt concerns [1](@ref)
13%
People with disabilities carrying medical debt [1](@ref)

STATE PROTECTIONS VS FEDERAL ROLLBACK

STATE SAFETY NETS

New York & Colorado

State laws prohibiting medical debt on credit reports remain active [5](@ref)

Debt Forgiveness Programs

States erasing billions in medical debt for pennies on the dollar [2](@ref)

Financial Assistance Laws

20 states have hospital financial assistance requirements [4,6](@ref)

FEDERAL GAPS

Vague Standards

Federal protections described as "vague and rarely enforced" [4,6](@ref)

Limited Protections

Few states limit home liens, foreclosures, or wage garnishment [4](@ref)

Insufficient Oversight

Only 5 states have robust reporting requirements for hospitals [4,6](@ref)

STATE MEDICAL DEBT ERASURE PROGRAMS

New York City
$2B
Debt erased with $18M investment [2](@ref)
Connecticut
$1B
Debt eliminated with $6.5M funding [2](@ref)
New Orleans
$130M
Debt canceled for 80,000 residents [2](@ref)

LEGAL BATTLE TIMELINE

January 2025

Federal Rule Announced

Vice President Harris announces removal of medical debt from credit reports [1](@ref)

March 2025

Industry Lawsuit Filed

Credit agencies and debt collectors challenge the rule in federal court [1](@ref)

July 2025

Federal Judge's Ruling

Court reverses medical debt rule, blocking nationwide implementation

Ongoing

Appeal Process

Administration files appeal while states expand their own protections [2,5](@ref)

PROTECT YOURSELF & TAKE ACTION

FOR CONSUMERS

Review Hospital Policies

Nonprofit hospitals must offer financial assistance programs [4](@ref)

Negotiate Directly

Hospitals often accept pennies on the dollar to settle debt [2](@ref)

Check State Programs

Many states have active medical debt relief initiatives [2,5](@ref)

FOR ADVOCATES

Support State Legislation

Push for stronger state-level protections [4,6](@ref)

Demand Hospital Accountability

Ensure nonprofit hospitals earn tax exemptions [4](@ref)

Support Federal Appeal

Advocate for reinstatement of the medical debt rule