Worried that President-elect Donald Trump will curtail federal efforts to take on the nation’s medical debt problem, patient and consumer advocates are looking to states to help people who can’t afford their medical bills or pay down their debts.
“The election simply shifts our focus,” said Eva Stahl, who oversees public policy at Undue Medical Debt, a nonprofit that worked closely with the Biden administration and state leaders on medical debt. “States are going to be the epicenter of policy change to mitigate the harms of medical debt.”
According to the National Institutes of Health, African Americans have 2.6 times higher odds of medical debt than do whites. Health status explained 22.8% of the observed disparity, and income and insurance explained 19.4%. These factors combined explain 42.4% of the observed disparity. They don’t explain, however, that African Americans are more likely to be contacted by a collection agency and to borrow money because of medical debt.
Minnesota is among 14 states that have strengthened patient protections against medical debt and other issues in the last few years. In October, Minnesota’s Debt Fairness Act went into effect.
Provisions of the law aim to make the state’s debt collection system fairer and more just, particularly when it comes to medical debt that people generally do not ask for, cannot shop for, and have virtually no choice in taking on. Among its provisions: The new law bans denying medically necessary care due to unpaid bills, reporting medical debt to credit reporting agencies, and automatically transferring medical debt to one’s spouse upon their passing.
But new state initiatives like those in Minnesota may not be enough to protect Americans from medical debt if the incoming Trump administration and congressional Republicans move forward with plans to scale back federal aid that has helped millions gain health insurance or reduce the cost of their plans in recent years.
Comprehensive health coverage that limits patients’ out-of-pocket costs remains the best defense against medical debt. But in the face of federal retrenchment, advocates are eyeing new initiatives in state legislatures to keep medical bills off people’s credit reports, a consumer protection that can boost credit scores and make it easier to buy a car, rent an apartment, or even get a job.
President Joe Biden’s administration proved to be an ally in state efforts to control health care debt. Such debt burdens 100 million people in the United States, a KFF Health News investigation found.
Led by Biden appointee Rohit Chopra, the Consumer Financial Protection Bureau (CFPB) made medical debt a priority, going after aggressive collectors and exposing problematic practices across the medical debt industry. Earlier this year, the agency proposed landmark regulations to remove medical bills from consumer credit scores.
The White House also championed legislation to boost access to government-subsidized health insurance and to cap out-of-pocket drug costs for seniors, both key bulwarks against medical debt.
Trump hasn’t indicated whether his administration will move ahead with the CFPB credit reporting rule, which was slated to be finalized early next year. Congressional Republicans, who will control the House and Senate next year, have blasted the proposal as regulatory overreach that will compromise the value of credit reports.
And Elon Musk, the billionaire whom Trump has tapped to lead his initiative to shrink government, last week called for the elimination of the watchdog agency. “Delete CFPB,” Musk posted on X.
If the CFPB withdraws the proposed regulation, states could enact their own rules, following the lead of Minnesota, Colorado, New York, and other states that have passed credit reporting bans since 2023. Advocates in Massachusetts are pushing the legislature there to take up a ban when it reconvenes in January.
“There are a lot of different levers that states have to take on medical debt,” said April Kuehnhoff, a senior attorney at the National Consumer Law Center, which has helped lead national efforts to expand debt protections for patients. Kuehnhoff said she expects more states to crack down on medical credit card providers and other companies that lend money to patients to pay off medical bills, sometimes at double-digit interest rates.
Under the Biden administration, the CFPB has been investigating patient financing companies amid warnings that many people may not understand that signing up for a medical credit card such as CareCredit or enrolling in a payment plan through a financial services company can pile on more debt.
Many advocates caution, however, that state efforts to bolster patient protections will be critically undermined if the Trump administration cuts federal funding for health insurance programs such as Medicaid and the insurance marketplaces established through the Affordable Care Act.
Trump and congressional Republicans have signaled their intent to roll back federal subsidies passed under Biden that make health plans purchased on ACA marketplaces more affordable. That could hike annual premiums by hundreds or even thousands of dollars for many enrollees, according to estimates by the Center on Budget and Policy Priorities, a DC-based think tank. And during Trump’s first term, he backed efforts in Republican-led states to restrict enrollment in their Medicaid safety net programs through rules that would require people to work in order to receive benefits.
Said Stahl of Undue Medical Debt: “That’s all a recipe for more medical debt.”
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.