Intimidating phone calls from bill collectors are a reality for millions of Americans. But thanks to the Biden administration, for folks with unpaid medical bills, help might soon be on the way.

That’s because on April 11 Vice President Kamala Harris announced the White House’s plan to ease the burden of unpaid medical bills and eliminate the consequential harassing phone calls from collections agencies.

“I have met so many people in so many communities in our nation who are struggling with this burden. Many of whom are managing an illness or an injury at the same time and who stay up at night, staring at the ceiling wondering if they’ll ever be able to pay off their medical debt,” Harris said at a press briefing. 

“No one in our nation should have to endure that. No one in our nation should have to go bankrupt just to get the healthcare they need.”

The four-part plan includes holding health care providers and debt collectors accountable, reducing the connection between unpaid medical bills and access to credit, forgiving medical debt for half a million low-income veterans, and ensuring consumers know their rights.

These policy changes come on the heels of a March announcement that major credit reporting firms will erase roughly 70% of medical debt from Americans’ credit reports starting in July.

“Having medical debt because you were sick or injured should not lower your credit score and make it more difficult to secure the help you need to get out of debt,” Harris said.

One-third of adults in the United States have medical debt, the White House reported — and Black households have more than any other racial or ethnic group. Collectively, Americans owe at least $195 billion in medical debt. 

According to the Survey of Income and Program Participation, 27.9% of households led by a Black person have medical debt, compared to 21.7% of households led by a Hispanic person, and 17.2% of households led by a white person.

Medical debt creates financial barriers, such as keeping a potential homebuyer from being approved for a mortgage.  

To ensure this is not the case for American homeowners, the Federal Housing Administration (FHA) eliminated medical debt from its mortgage approval process when considering a borrower’s creditworthiness. 

Additionally, as a part of this new  initiative, the Biden-Harris administration is providing guidance to all agencies to eliminate medical debt as a factor for underwriting in credit programs. 

“Medical debt is not a reliable indicator of credit quality, and its impact should be reduced or eliminated to give more American families the opportunity to thrive,” the White House said in a statement

When people accumulate medical debt, they may also “be subjected to persistent and aggressive collections practices.” As a result, both the U.S. Department of Health and Human Services (HHS) and the Consumer Financial Protection Bureau (CFPB) are launching investigations into such practices.

Too many Americans with lower income, poorer health, and from communities of color have higher rates of medical debt.

Xavier Becerra, U.S. Dept. of Human and Health Services Secretary

“Remember what we are talking about. Folks who are in the process of attempting to recover from an illness, for example,” Harris said. “That sort of harassment and intimidation is unethical, and often, it is illegal. And that is why the CFPB has made it a priority to hold debt collectors accountable.”

CFPB will investigate credit reporting companies and debt collectors that violate patients’ and families’ rights. 

Separately, HHS will collect data from over 2,000 providers on medical bill collection practices, lawsuits against patients, financial assistance, financial product offerings, and third party contracting or debt buying practices. 

“Unfortunately, this burden is not shouldered equally in America,” HHS Secretary Xavier Becerra said at the event. “Too many Americans with lower income, poorer health, and from communities of color have higher rates of medical debt.”

The final parts of the administration’s medical debt initiative include education—where CFPB will upgrade its consumer education tools to support families in navigating medical billing—and helping over half a million low-income veterans get their medical debt forgiven.

“No veteran should ever have to choose between life-saving healthcare and putting food on the table for their families,” U.S. Department of Veteran Affairs Deputy Secretary Donald Remy said at the briefing. “And on our watch, they never will.”