AARP Fights to Keep Medical Debt Off Credit Reports

Why medical debt is hard to predict

Medical debt can rack up no matter how scrupulously you plan for health needs. The cost of a procedure or the amount insurance will cover can be tough to calculate, and it may take a while for reimbursement to come through. A high bill can also be the result of a medical emergency or a billing error you are trying to dispute.

One in 8 adults ages 50 to 64 had unpaid medical bills in 2023, according to AARP’s January report.

“A lot of medical debt on credit reports is due to the dysfunction of our medical system,” says Chi Chi Wu, the director of consumer reporting and data advocacy at the National Consumer Law Center. Most medical debt is reported by debt collectors, not health care providers, she says.

Even people with insurance are not immune. Seventy percent of midlife adults with medical debt in 2023 were covered by health insurance from their employer or the health care marketplace, according to AARP’s report. Those with chronic conditions or a high-deductible plan or who need services not covered by insurance are especially at risk.

Those on Medicare are vulnerable as well. For example, long-term care and dental and hearing expenses are not generally covered, and traditional Medicare does not cap out-of-pocket expenses.

Medicaid enrollees also may find themselves grappling with medical debt. By January 2027, states will require Medicaid recipients ages 50 to 64 to work or volunteer 80 hours per month. About 3.5 million adults ages 50 to 64 are at risk of losing their coverage, according to the authors of a new study from the Smith Center for Outcomes Research at Beth Israel Deaconess Medical Center in Boston.

At the same time, the cost of marketplace coverage shot up for this same age group after Congress allowed the Affordable Care Act’s enhanced premium tax credits to expire at the end of 2025. Some older adults were forced to choose plans with high deductibles to save on premiums; others felt they had no choice but to go without.

Efforts to address the problem at risk

Despite progress, efforts to keep medical debt off credit reports are being scrutinized. In January 2025 the Consumer Financial Protection Bureau, under the Biden administration, finalized a rule that would have removed all medical debt from consumer credit reports, but a federal judge struck it down in July. AARP had written to then-CFPB director Rohit Chopra in 2024 expressing support for the proposed rule.

Under the Trump administration, the CFPB has claimed that federal law supersedes a state’s ability to regulate consumer credit reports. Although this guidance is not legally binding, it may give providers or debt collectors ammunition to challenge existing laws or thwart state-level consumer protections.

“Whether or not a state can regulate medical debt on credit reports will be up to the federal courts in that state,” Wu says. For example, the debt collection industry in Colorado has sued the state over its credit reporting law, but, Wu says, there has been no substantive ruling yet.

AARP continues to take action

There has been some progress toward eliminating these liabilities from credit reports.

The three major credit bureaus voluntarily began omitting medical debt that was less than one year delinquent and removing paid debts from credit reports in 2022; they also voluntarily stopped including medical collections under $500 in 2023.

States then started implementing their own laws that go further. For example, New York passed a law in 2023 banning hospitals, medical providers and ambulance services from reporting medical debt to credit bureaus and credit bureaus from recording this information on consumer credit reports — a bill that AARP New York supported.

Although medical debt affects people of any age, “we find that as people get older, they use medical services much more frequently, and those costs tend to go up as their care becomes more complex,” says Kristen McManus, director of government affairs and advocacy for AARP New York.

The Community Service Society of New York, a consumer advocacy group that AARP New York partnered with on medical debt legislation, estimated in 2025 that $241 million to $337 million had been removed from consumer credit reports because of the 2023 law.

“This issue started to pop a lot in 2023 and hasn’t relented since,” says Jordan Endicott, a government affairs director at AARP. “This is part of a broad push for health care affordability. That pressure is not going away at all in 2026.”