KFF Health News: Trump Team Takes Aim at State Laws Shielding Consumers’ Credit Scores From Medical Debt
October 28, 2025
KFF Health News: Trump Team Takes Aim at State Laws Shielding Consumers’ Credit Scores From Medical Debt
The Trump administration has taken a significant step to undermine protections for Americans grappling with medical debt. On Tuesday, new guidance was issued that threatens ongoing state initiatives aimed at preventing medical debt from impacting consumers’ credit reports.
In recent years, over a dozen states—including Washington, Oregon, California, Colorado, Minnesota, Maryland, New York, and most of New England—have enacted laws designed to shield consumers from the adverse effects of medical debt on their credit scores.
Additionally, several states in conservative regions, particularly in the Midwest and Mountain West, are considering similar protections. This movement is fueled by bipartisan concerns that medical debt can hinder individuals from securing essential items like homes, cars, or even jobs.
Currently, approximately 100 million Americans are burdened with some form of healthcare debt, with millions facing unpaid bills exceeding $10,000.
In the newly released guidance, the Consumer Financial Protection Bureau (CFPB) asserts that federal law prohibits states from restricting the reporting of medical debts. The bureau argues that only the federal government holds the authority in this area.
“Congress meant to occupy the field of consumer reporting and displace state laws,” the CFPB concluded in an “interpretive rule” signed by Russell Vought, the White House budget director and acting head of the CFPB.
This guidance represents a shift from policies promoted under former President Joe Biden, which aimed to empower states to enhance protections for individuals facing medical debt.
While the Trump administration’s latest directive will not immediately dismantle existing state protections, advocates for patients and consumers express concern that it may hinder progress in other areas. This comes at a time when millions of Americans are on the verge of losing federal assistance that helps them afford health insurance through the Affordable Care Act, with the aid currently entangled in a budget standoff between congressional Republicans and Democrats.
“You’d be hard-pressed to find a crueler regulatory interpretation,” remarked Elisabeth Benjamin, a vice president for the Community Service Society of New York, a nonprofit advocating for medical debt protections in the state.
Lucy Culp, who oversees state lobbying efforts for Blood Cancer United, formerly known as the Leukemia & Lymphoma Society, cautioned that the Trump administration’s guidance could have nationwide repercussions. “This rule will have a chilling effect on states’ willingness to pass these critical patient protections,” she stated.
The CFPB has yet to respond to requests for comment regarding the new guidance, which may lead to increased litigation challenging state restrictions on medical debt credit reporting.
Earlier this year, trade groups representing credit reporting agencies and debt collectors initiated legal action against regulations introduced by the Biden administration that aimed to eliminate medical debt from credit reports nationwide. They contended that the administration overstepped its authority in implementing these restrictions.
The federal regulations would have benefited an estimated 15 million individuals. However, the Trump administration opted not to defend these new regulations, leading to a ruling by a federal judge in Texas—appointed by Trump—that deemed the regulations invalid before they could take effect.
The Consumer Data Industry Association, representing credit agencies, welcomed the Trump administration’s guidance, arguing that a unified national standard is necessary for governing how information is reported to consumer agencies.
“There should be one national standard to govern how information is provided to consumer reporting agencies and what information can appear on a consumer’s credit report,” stated association president Dan Smith.
Broader health insurance protections could help prevent more Americans from falling into debt and negatively impacting their credit scores. However, millions of Americans are expected to lose health coverage in the coming years due to the tax and spending bill signed by the president in July.
“Millions of Americans are avoiding medical care, putting off needed surgeries, skipping essential treatments,” said Allison Sesso, president and chief executive of Undue Medical Debt, a nonprofit focused on alleviating patients’ debts and advocating for broader patient protections.
“This isn’t just a health care issue,” Sesso added. “It’s an economic crisis that’s keeping families from building wealth and fully participating in the economy. When credit scores are dinged by medical bills, everyone loses.”
KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.
October 28, 2025
KFF Health News: Trump Team Takes Aim at State Laws Shielding Consumers’ Credit Scores From Medical Debt
The Trump administration has taken a significant step to undermine protections for Americans grappling with medical debt. On Tuesday, new guidance was issued that threatens ongoing state initiatives aimed at preventing medical debt from impacting consumers’ credit reports.
In recent years, over a dozen states—including Washington, Oregon, California, Colorado, Minnesota, Maryland, New York, and most of New England—have enacted laws designed to shield consumers from the adverse effects of medical debt on their credit scores.
Additionally, several states in conservative regions, particularly in the Midwest and Mountain West, are considering similar protections. This movement is fueled by bipartisan concerns that medical debt can hinder individuals from securing essential items like homes, cars, or even jobs.
Currently, approximately 100 million Americans are burdened with some form of healthcare debt, with millions facing unpaid bills exceeding $10,000.
In the newly released guidance, the Consumer Financial Protection Bureau (CFPB) asserts that federal law prohibits states from restricting the reporting of medical debts. The bureau argues that only the federal government holds the authority in this area.
“Congress meant to occupy the field of consumer reporting and displace state laws,” the CFPB concluded in an “interpretive rule” signed by Russell Vought, the White House budget director and acting head of the CFPB.
This guidance represents a shift from policies promoted under former President Joe Biden, which aimed to empower states to enhance protections for individuals facing medical debt.
While the Trump administration’s latest directive will not immediately dismantle existing state protections, advocates for patients and consumers express concern that it may hinder progress in other areas. This comes at a time when millions of Americans are on the verge of losing federal assistance that helps them afford health insurance through the Affordable Care Act, with the aid currently entangled in a budget standoff between congressional Republicans and Democrats.
“You’d be hard-pressed to find a crueler regulatory interpretation,” remarked Elisabeth Benjamin, a vice president for the Community Service Society of New York, a nonprofit advocating for medical debt protections in the state.
Lucy Culp, who oversees state lobbying efforts for Blood Cancer United, formerly known as the Leukemia & Lymphoma Society, cautioned that the Trump administration’s guidance could have nationwide repercussions. “This rule will have a chilling effect on states’ willingness to pass these critical patient protections,” she stated.
The CFPB has yet to respond to requests for comment regarding the new guidance, which may lead to increased litigation challenging state restrictions on medical debt credit reporting.
Earlier this year, trade groups representing credit reporting agencies and debt collectors initiated legal action against regulations introduced by the Biden administration that aimed to eliminate medical debt from credit reports nationwide. They contended that the administration overstepped its authority in implementing these restrictions.
The federal regulations would have benefited an estimated 15 million individuals. However, the Trump administration opted not to defend these new regulations, leading to a ruling by a federal judge in Texas—appointed by Trump—that deemed the regulations invalid before they could take effect.
The Consumer Data Industry Association, representing credit agencies, welcomed the Trump administration’s guidance, arguing that a unified national standard is necessary for governing how information is reported to consumer agencies.
“There should be one national standard to govern how information is provided to consumer reporting agencies and what information can appear on a consumer’s credit report,” stated association president Dan Smith.
Broader health insurance protections could help prevent more Americans from falling into debt and negatively impacting their credit scores. However, millions of Americans are expected to lose health coverage in the coming years due to the tax and spending bill signed by the president in July.
“Millions of Americans are avoiding medical care, putting off needed surgeries, skipping essential treatments,” said Allison Sesso, president and chief executive of Undue Medical Debt, a nonprofit focused on alleviating patients’ debts and advocating for broader patient protections.
“This isn’t just a health care issue,” Sesso added. “It’s an economic crisis that’s keeping families from building wealth and fully participating in the economy. When credit scores are dinged by medical bills, everyone loses.”
KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.
