Just before President Joe Biden left office, the Consumer Financial Protection Bureau (CFPB) enacted a rule to block medical debt from consumer credit reports. The rule became a political target almost immediately. Some members of Congress tried to overturn it, and the Trump administration stopped it from taking effect until a federal judge struck down the rule altogether this summer.

The policy would have helped millions of Americans struggling with medical debt, including more than 170,000 Nevadans. It would have provided much more than financial relief, because medical debt affects people’s lives in surprising ways.  

For starters, medical debt can kill you. Patients who are in a financial hole worry that seeing a doctor or going to a hospital will only push them deeper into that hole. People with medical debt are more likely to delay care, which increases the likelihood of bad health outcomes, including the risk of death. 

Even a 1 percent increase in medical debt is associated with poorer health, higher mortality and lower life expectancy. Medical debt is unique that way: Taking out a car loan or carrying a balance on your credit card is unlikely to hurt your health, but falling behind on hospital bills might.

Then there are the financial consequences. Medical debt and general personal financial distress are part of a vicious cycle. The less money you have, the more likely you are to get stuck with a medical bill you can’t afford. Then to repay the debt, you may have to forgo other necessities, sharpening current financial stresses or creating new ones. 

Finally, when medical debt appears on a person’s credit report, it makes them seem less creditworthy than they actually are. In other words, even if medical debt strains a person’s finances, credit-scoring models overstate the depth and the duration of the strain. Studies show that removing medical debt significantly improves credit scores and opens up more access to credit.

In Nevada, 7.2 percent of adult Nevadans — or about 170,000 people — report carrying medical debt in a given year. But that figure likely understates the problem, because it considers only “significant” debt greater than $250. It also doesn’t account for procedures paid for with credit cards and other forms of borrowed money.

But there’s hope. State lawmakers can give relief to Nevadans by passing a law that bans medical debt from credit reports. Nevada took a step in the right direction this year, passing a bill, AB343, that bans hospitals from reporting medical debt if the hospital doesn’t follow state price-transparency laws. But this isn’t enough. Especially now with the Trump administration systematically attacking consumer protections, Nevadans need a straightforward ban on reporting medical debt to credit agencies, following the example of Minnesota, Colorado and other states.

Lawmakers should also address the medical debt crisis by curbing the abuses of the hospital industrial complex. Hospitals are the biggest drivers of medical debt in America. By stopping hospitals from overcharging and by requiring nonprofit hospitals to act like genuine nonprofits, Nevada lawmakers can stop the medical debt crisis in its tracks.

Take overcharging. When RAND Corporation crunched the numbers, it found that hospitals charged privately insured patients two-and-a-half times what they charged patients on Medicare. Nevada was no exception: Patients with private, employer-provided insurance were charged an average of 268 percent of what Medicare patients were charged.

Additionally, researchers at Johns Hopkins University found that hospitals routinely charged patients many times more than what it cost to provide care. Sunrise Hospital and Medical Center in Clark County, for example, charged patients almost 13 times the cost of care. State lawmakers should move quickly to check this kind of greed.

They should also require Nevada’s nonprofit hospitals to devote more resources to charity care or free or discounted care to the poor. After all, nonprofit hospitals are incorporated as charitable entities and generally pay no local, state or federal taxes. In exchange for those tax breaks, they’re supposed to provide real benefits to the community. It’s a basic part of their mission, and lawmakers should ensure that nonprofit hospitals live up to it.

Right now, they’re not. The Lown Institute found that more than half of the nation’s nonprofit hospitals are running a fair share deficit, receiving far more in tax breaks than what they spend on charity care. In Nevada, 80 percent of nonprofit hospitals are running a fair share deficit. It shows that nonprofit hospitals want the gravy without the grief: They want to pay no taxes while skimping on charity care and pushing poor patients into debt. That must end, and Nevada’s lawmakers can get it done if they have the political will.

Across Nevada, tens of thousands of families struggle under the weight of medical debt. The Trump administration, with the help of a federal judge, robbed them of relief. It’s a tragedy, but it’s also an opportunity for Nevada lawmakers. They'll not only lift an unfair financial burden off the shoulders of Nevadans — they'll actually save lives.

James P. Manley served as senior communications adviser and spokesman for former Senate Majority Leader Harry Reid (D-NV) and the Senate Democratic Caucus. He is on the board of directors of Consumers for Quality Care.