New rule could ban medical debt on your credit report; some look to fight rule

$220 billion. That's how much medical debt is weighing on 20 million Americans. Now leaders in D.C. are trying to make sure that debt has less of an impact on their lives. News 5 investigator Jonathan Walsh, you've been all over medical debt problems for several years now. And a new rule now will keep medical debt off of our credit reports. Well that's the big question guys. The Consumer Financial Protection Bureau finalized the rule to a point. Now there's a bunch of work that still needs to be done here. Creditors promise a fight. But if fully enacted, this would not only be a big deal across our area, but across the country too. I'm very pleased with that ruling. That's Chris Hoyt from Madison and his reaction to banning medical debt from credit reports as announced by the Consumer Financial Protection Bureau, or CFPB. We did a story last year with Chris when he had problems with medical billing and was told that if he didn't pay a bill, it would go on his credit report. He was troubled by that, but not surprised by the threat. As a retired banker, I used to review credit all the time and medical bills were not uncommon. The CFPB reports by removing medical debt it could boost people's scores by 20 points and lead to about 22,000 more people getting approved for mortgages. Well we think this is a great day for patients and their families. Chuck Bell is a financial policy advocate with Consumer Reports. He says while medical But what the CFPB has found is that medical debt is really not predictive of a consumer's ability to repay loans for a car or for a house, for example. The rule is set to go into effect in 60 days. We reached out to the Consumer Data Industry Association, or CDIA, that represents consumer reporting agencies. In a statement, it said in creditors from considering medical debt. Congress established a detailed framework governing the content of credit reports. Chuck says Congress has six months to overturn the rule, but he hopes it does not. People do work diligently to try to pay it off and it really hurts if they jack up your interest rates when you're trying to buy a car so that you can get to work and pay off your debts. Chris hopes they don't too. I'm hoping lawmakers and all the principals involved take the high road on this. The group that represents consumer reporting agencies says it's now evaluating all options to combat this rule. And guys this is pretty significant because I don't know if you remember Cleveland City Council and Akron recently approved money to wipe away medical debt altogether for people living in those cities and so far reports show tens of thousands of people have had tens of millions of dollars in medical debt removed which by the way helps their credit reports. But as you said we'll see if the rule survives. A lot of road to go here. Yeah you've been on it for a while you're not done yet. No sir. Because there is more. Medical debt just does not just impact your financial health. It can be a threat to your physical health as well. Recent study by the American Cancer Society found medical debt was associated with more days of poor physical and mental health, more years of life lost due to premature death, and higher mortality rates. And that includes a strong association across all major causes of death including heart disease, cancer, and suicide. Suggesting that financial hardships may cause a strain on physical and mental health. Counties with higher levels of medical debt also had higher levels of population without a high school degree, living in poverty, unemployed, and also uninsured. Dr. Yabroff says another link between medical debt and your health knowing what the cost will be before you get care for treatment.