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business Tuesday 21 June 2022
Liz Weston: Is medical debt vanishing from credit reports?

By LIZ WESTON less harshly, since research shows Recent moves by the Biden admin-
of NerdWallet health care bills aren’t as reliable istration could help improve access
Health care bills are about to be- as a gauge of creditworthiness to credit. On April 11, Vice President
come far less threatening to the compared to other types of collec- Kamala Harris announced addi-
financial well-being of millions of tions. But most lenders still use older tional reforms, including reducing
Americans. credit scores that don’t distinguish or eliminating medical debt as a
The three major credit bureaus are medical debt from other overdue factor in government lending de-
erasing most medical debts from bills. cisions. That should make many
people’s credit reports, and the Rather than wait for lenders to up- home and business loans easier to
Biden administration is reducing date to the latest credit scores — get. Also, Veterans A ffairs, which
or eliminating medical debt as a a process that could take years, has already erased $1 billion in
factor in government lending deci- if it ever happens — the CFPB an- copayments owed by veterans,
sions. nounced on March 1 that it would promised to streamline the process
Here’s what you need to know investigate whether medical debt so more low-income vets can have
about medical debt now. should be included on credit re- their VA bills forgiven. The VA has
1 IN 5 U.S. HOUSEHOLDS HAS MEDI- ports at all. also stopped reporting most vet-
CAL DEBT Seventeen days later, the three erans’ medical debts to the credit
Roughly 1 in 5 U.S. households credit bureaus — Equifax, Experian bureaus.
have medical debt, according to and TransUnion — responded by WHAT YOU CAN DO TO DEAL WITH
the Consumer Financial Protection promising to remove nearly 70% MEDICAL DEBT
Bureau. Some aren’t insured, while of medical debts from consumer Soon you won’t have to worry
others struggle to pay deductibles credit reports within the next year. about a minor medical bill tanking This undated file photo provided
and other cost-sharing. Insurance MOST MEDICAL DEBTS DISAPPEAR- your credit scores. But catastrophic by NerdWallet shows Liz Weston, a
billing is byzantine, to say the least, ING FROM CREDIT REPORTS medical bills could still upend your columnist for personal finance website
NerdWallet.com.
and it’s easy to lose track of a bill Starting July 1, all paid medical finances. Consider taking the fol- Associated Press
while your insurer decides how collections will be eliminated from lowing steps to reduce your vulner-
much, or whether, to pay. people’s credit files, and no unpaid ability to medical debt:
Many of these unpaid bills wind bill will be reported until 12 months — STAY COVERED, IF YOU POS-
up on people’s credit reports. The have passed — an increase from SIBLY CAN. Insured people enjoy Dispute any mistakes you find.
CFPB found medical debts on 43 the current term of six months. By more consumer protections , and — ASK FOR HELP. Hospitals and oth-
million credit reports last year, and June 30, 2023, the three bureaus better access to health care, than er health care providers may have
medical debts made up 58% of all will also stop reporting unpaid the uninsured. People who aren’t financial assistance programs that
bills in collections as of the second medical debts under $500. covered by workplace insurance could reduce or eliminate your bills.
quarter of 2021. Collections can Consumer advocates hailed the or government plans such as Medi- (Nonprofit hospitals are required to
depress your credit scores, which changes but noted that those with care can find coverage through have such programs but may not
can make it harder to get loans or larger debts would still face credit Affordable Care Act exchanges. offer help unless you ask.)
require you to pay higher interest damage. About 16 million people Start your search at healthcare. — AVOID USING CREDIT CARDS
rates. Bad credit also can cause (6% of U.S. adults) owe more than gov. Most uninsured people qual- IF YOU CAN’T PAY IN FULL. Credit
you to be turned away from jobs $1,000 in medical debt, and 3 mil- ify for subsidies to make premiums cards tend to have high interest
or apartments, and require you to lion (1%) owe more than $10,000, more affordable. rates that make debt harder to
pay more for car and home insur- according to KFF, the nonprofit — CHECK ALL MEDICAL BILLS FOR pay. Many health care providers
ance. health research organization for- ERRORS. Billing errors are common, offer interest-free payment plans
Newer versions of credit scor- merly known as the Kaiser Family so request itemized bills for hospi- that allow you to pay off your bill
ing formulas treat medical debt Foundation. tal stays and complex procedures. over time.q

Circle CEO Jeremy Allaire on cryptocurrency market turmoil

By KEN SWEET bled time for the industry? accounts. That’s it. We’re Congress’ efforts to regu-
AP Business Writer A: In some ways, it’s a starting in a really simple late crypto?
NEW YORK (AP) — Circle is great time to be launching way. A: You’re seeing two ap-
the cryptocurrency com- products that increase the Q: Terra, a so-called “al- proaches on this issue. You
pany behind USD Coin, the utility value of blockchain gorithmic stablecoin,” col- can take the targeted ap-
second-largest so-called technologies. The market lapsed in May, erasing $40 proach like regulating sta-
“stablecoin” in the crypto turmoil has been a really billion in wealth in hours. blecoins, or you can take
industry. positive catalyst for USDC. This month the company the omnibus approach
Unlike more popular cryp- It has been the flight to Celsius froze all deposits and regulate the entire
tocurrencies like bitcoin, safety for crypto. (...) With and appears to be the industry. But my view has
stablecoins are typically the launch of Euro Coin, crypto equivalent of a been that the Biden ad-
backed by gold, govern- we’re bringing the same bank failure. What’s going ministration and Congress
ment bonds, cash or other This photo provided by Circle technology, regulatory on here? — Democrats and Repub-
assets, and are typically shows Jeremy Allaire. framework, trust, transpar- A: It reinforces our view, licans — will agree on the
priced on a 1:1 ratio with Associated Press ency, and reporting that whether it will be with need for clear national
the U.S. dollar. More than Circle’s launch of Euro we put into USDC. stablecoins or cryptocur- policy on stablecoins. It’s
$50 billion is stored in USDC, Coin, its euro equivalent Q: How will you back Euro rencies, that it should be the lowest hanging fruit.
second only to Tether, a ri- of USD Coin. He also spoke Coin? Are you going to done inside the regulated Q: Turmoil in the crypto in-
val stablecoin with $70 bil- about broader turmoil in hold Eurobonds like you U.S. banking system. And dustry has caused layoffs
lion in assets. the cryptocurrency space. hold Treasuries for USDC? that’s why we’ve run USDC at many firms. Coinbase
Co-founder and CEO Jer- Q: Why are you launch- A: It’s going to be just euro as we have for four years. laid off 18% of its staff this
emy Allaire spoke to The ing a new cryptocurrency, currency, held in euro- And that’s holding up. week. How are you being
Associated Press about Euro Coin, during this trou- denominated banking Q: What do you make of impacted?q