The push to wipe medical debt from credit reports

Make Me Smart June 13, 2024 Transcript

Note: Marketplace podcasts are meant to be heard, with emphasis, tone and audio elements a transcript can’t capture. Transcripts are generated using a combination of automated software and human transcribers, and may contain errors. Please check the corresponding audio before quoting it.

Kimberly Adams 

What does it supposedly do?

Kristin Schwab 

It’s just, I mean, either you could burp, or you have those, like little fizzy, sometimes your chest has that, like little fizzy noise. And it’s like.

Kimberly Adams 

Well, hadn’t heard that before. Hello everyone, I’m Kimberly Adams. Welcome back to Make Me Smart, where we make today make sense.

Kristin Schwab 

And I’m Kristin Schwab in for Kai Ryssdal. Thanks everybody for joining us. It’s Thursday, June 13.

Kimberly Adams 

And it’s our audio show day. So, today we’re going to listen back to some of the big news stories of the week, or a couple weeks or whatever. But we’ve got some audio clips lined up. Let’s hear our first one from Vice President Kamala Harris.

Kamala Harris

“People are carrying so much debt, so we’ve been looking at, for example, medical debt. Medical debt because usually it’s because somebody faces a medical emergency for which they were not prepared, didn’t have the savings, and we have now, we are on track to say that medical debt cannot be counted in your credit score.”

Kimberly Adams 

That was Vice President Kamala Harris from her appearance on “Sherri,” the talk show with Sherri Shepherd, last month. She was talking about the Biden administration’s plans to remove medical debt from Americans’ credit scores. Shout out to the series we did on Marketplace Tech a while back about credit scores. Super interesting. Hope you listen to it. But anyway, on Tuesday, the Consumer Financial Protection Bureau went ahead and proposed a rule. And you know, I love a good regulation rules public comment periods. Weigh in everybody. Anyway, it would ban medical bills from most credit reports. Now this year, the Consumer Financial Protection Bureau recently vindicated by the Supreme Court the United States found that 15 million Americans collectively have, wait for it, $49 billion in medical debt appearing in the credit reporting system, and that’s despite previous efforts over like, the last two decades or so to limit the impact that these medical bills have on credit scores. Now, before the proposed rule goes into effect, it will go through a public comment period, which runs until August 12, and I know. Thank you, Courtney for putting that in for my benefit. I know that a lot of times government seems inaccessible and far away, but the public comment period on federal regulations really is the opportunity for regular folks to weigh in on this. You can be sure that the hospitals and the folks that profit off of the system as the way it exists now will be weighing in and will be having their say about this. But if you or somebody you know has experience with medical debt, this is your opportunity to weigh in and shape these regulations. And from my conversations with people who work in federal agencies, they look at this stuff, and they actually do take these comments into consideration when they’re shaping the final rules.

Kristin Schwab 

Yeah, real stories matter. I mean, it’s why we do what we do, but it’s important to bleed into other areas as well.

Kimberly Adams

Bleed into other areas.

Kristin Schwab

Yeah, I really didn’t mean to make that happen. Okay, so next up, we have a clip from an interview I did with the Washington Post Abha Bhattarai on Marketplace earlier this week, and we were talking about how more young adults are getting help from their parents to buy their first home.

Abha Bhattarai

“I think for so long we’ve thought of home ownership as this really important milestone. I mean, it’s the American dream, and for a lot of families, it’s the most surefire way of accumulating long-term wealth and generational wealth that they can pass down. And I think parents are starting to realize that if they have the means to help their children, that maybe, maybe it makes sense to help their children.”

Kristin Schwab 

Yeah, so there are a lot of ways parents are helping. They are handing over cash for a down payment. They’re borrowing against their own homes and increasingly, according to Freddie Mac, the share of young homebuyers with a cosigner is as high as it’s been in at least 30 years. And I think that just really speaks to how many first-time homebuyers just do not make enough money to qualify for a modest starter home. And you know, Abha spoke to people across the income spectrum, across the country, so not just in those classically high, high mortgage, high home sales areas. And so, it’s not just a wealthy family trend. And she talked a lot about how if buying a home continues to be so unattainable, generational transfer of wealth may become a really important piece of getting ahead or just staying afloat.

Kimberly Adams 

I’ve been seeing this so much within my own circle, where the vast majority of people I know my age who own homes had their parents help them with the down payment, or their parents cosigned, or, you know, they came from family wealth. They had some kind of trust, so few people are doing it on their own. And, you know, I was doing a story on the mortgage interest deduction a while back, and I was trying to find somebody to interview like, a real person for the story. And I knew some young guy who had recently purchased a condo, and I was like, oh, can I talk to you for this story about the mortgage interest deduction? And he was like, I’m not paying interest. My parents bought the condo for me or helped him buy the condo. And then, I know other people from, you know, who maybe they didn’t buy their home, but their parents moved into a smaller home or into a condo and let them take over their mortgage, or, like, just let them have the house. They gave the house to them. And you know, it’s so much of a bummer because if your parents don’t have wealth at this point, right? It’s incredibly challenging, right? For a younger person to build wealth at all.

Kristin Schwab 

Yeah, I mean; to even take out a mortgage or take out a loan against your home, you have to have a home to begin with.

Kimberly Adams 

Yeah, your parents have to have a home, or a family member has to have a home. And even if you qualify for a mortgage tese days, you’re qualifying for way more than most people can afford. I remember when I was trying to buy my place, I qualified for something like, two times what I could reasonably afford in terms of a mortgage. And I was like, what? Who was doing this? And yeah, it was wild.

Kristin Schwab 

Mortgages and student loans, things we have lots of access to.

Kimberly Adams 

Yes, yes, yes, yes. Okay, moving on. The next clip is from an interview that I did with Sarah Bryner, who’s a research director at OpenSecrets, which is an organization that tracks money in politics. We were talking about all the money that’s being spent on state and local elections, as opposed to these bigger federal runs, these bigger federal ones. And here’s what she had to say about it.

Sarah Bryner

“The people who are supporting the presidential candidates are also supporting via nonprofits or via political action committees or via just grassroots movements. Candidates much closer to home. So, when you think that you’re voting for, you know, your city council person, who is somebody you know personally, that city council person is in all likelihood benefiting from the exact same type of political committee and the exact same individuals that are supporting federal candidates.”

Kimberly Adams 

It’s been so fascinating over the last few cycles, and I’ll date myself a bit here, but I’ve been covering federal elections and presidential elections since 2000, right? And it’s been increasingly obvious that a lot of these deep pocketed national movements are getting way more bang for their buck in terms of changing policies by spending relatively small amounts of cash in lots of local elections rather than writing these massive checks for federal candidates, which they are also still doing. But it’s a lot easier to swing a school board race or city council race, or even a local judge who might be seeing a business case and making decisions about policies that can set precedent. It’s a lot easier to swing those races at the local level than it is at the federal level when the attention is much greater, and especially with the decline of local news. There aren’t as many people watching. And so, what we’re seeing increasingly, when we can see it, which is rare, is these big national organizations getting very involved in local politics. I think a lot of people saw it for the first time with a lot of the book bans and the school board races and the moms for liberty thing, where a very clearly nationally organized effort started having major influence in a lot of small local areas. But the same thing is happening in state legislatures, where you have pieces of legislation being written by organizations and then just rubber stamped and duplicated across state legislatures all over the country. And so, this is just another appeal to pay attention to your local races. I mean, the easiest way to think about it is if you think you don’t care about your local races. If you’re in a place that elects judges, imagine if you were in front of the judge, right? Probably rather that be somebody you voted for in terms of their fairness and their balance, as opposed to somebody who was put there by a national interest with someone’s interest other than yours.

Kristin Schwab 

Yeah, it just takes one small but mighty domino to tip into all the line of the rest.

Kimberly Adams

For sure.

Kristin Schwab

Okay, so our last clip for today is about Apple’s new jump into artificial intelligence. Let’s hear it.

Apple ad

“You want a T-Rex on a surfboard? You’ve got a T-Rex on a surfboard. Simply type a description of the emoji you want. How about a smiley face with cucumber eyes or something random, like a squirrel DJ? And because Apple Intelligence knows who’s in your photo library, you can turn your friend Vee into an astronaut.”

Kimberly Adams 

I’m already an astronaut.

Kristin Schwab 

I feel like the emoji keyboard covers a good gamut of things, but you know, I’ll take a squirrel DJ. That was the promo video for the launch of Apple’s plans to incorporate AI into its devices called Apple Intelligence, which retains that AI acronym. Very clever. And on Monday, Apple announced it’s partnering with ChatGPT to bring AI features to text, email, photos and Siri, and as you just heard, emojis. Megan McCarty Carino, our Marketplace reporter, did some reporting on this this week, and basically the consensus is that Apple’s a little behind on AI integration, but that that’s kind of Apple’s thing is that it doesn’t do things first. It tries to do things better potentially. And so, its strategy tends to be to let other people work out the kinks before it pours money into something.

Kimberly Adams 

Yeah, it’s not going to have the Google Search summary blunder on the Apple brand. You know, it’s interesting that you mentioned you know that the emoji keyboard covers quite a few things because having set emojis, as I think about it, creates a common language, right? How many stories have we done at Marketplace about how different generations interpret different emojis.

Kristin Schwab

The thumbs up.

Kimberly Adams

The thumbs up. The kissy face versus, you know, the eye rolling the, you know, the constant, you know, way that Gen Zers mock millennials at our laugh crying emojis.

Kristin Schwab

Oh yeah, I use that one a lot.

Kimberly Adams

It’s what we do.

Kristin Schwab 

And I only use the thumbs up at work in a serious gotcha sense, but I cannot use the thumbs up in text with friends because they’ll think I’m angry at them.

Kimberly Adams

Angry at them, right? It’s like and, but we have developed a whole language around what these symbols mean, right? Over the course of decades. And so, if we don’t use them anymore, and everything is AI generated. If we AI generate emojis, you know, we’re not going to have a common language around them anymore. So, I wonder how many people just, kind of, default to the old emojis will just still just because they maybe understand what they mean.

Kristin Schwab 

Yeah, and it’s also kind of just fun to be in on the joke a little bit.

Kimberly Adams 

Yeah. I mean, I think I have a reputation at Marketplace on Slack at this point for a particular response emoji. Do you know what it is?

Kristin Schwab

No, what is it?

Kimberly Adams

Dancing penguin. Always. I use the dancing penguin Slack response to just about everything. If I’m happy, I’m excited, if I want just general acknowledgement, always a dancing penguin emoji. Why? I just think it’s cute.

Kristin Schwab 

I like the cat spinning on the Roomba.

Kimberly Adams 

Yeah, yeah. Some of them are just universal. You can just, you know, be a dancing penguin. Why not? You know what I would love to hear from everyone, what your kind of default emoji is, and whether or not you’d be game to change it to something, you know, artificially intelligence generated? You know, different like, yeah. I feel like everybody’s kind of got their go to emoji, so tell me what your favorite emoji is, or what emoji etiquette you’ve recently learned, especially if it’s something you thought you knew that you later found out you were wrong about related to emojis. But yeah, we’d love to hear from you, all our number is 508-U-B-SMART. And you can also email us at [email protected]. That is it for today. Kai and I will be back tomorrow. You can join us for Economics on Tap. We will have more news, drinks, probably something I grabbed from a bodega, and a game. The YouTube live stream starts at 3:30 Pacific, 6:30, Eastern. Do not miss it. We need like, a bodega cat emoji.

Kristin Schwab 

Oh, are they special from different from regular cat emojis?

Kimberly Adams 

Bodega cats are different in general. Make Me Smart is produced by Courtney Bergsieker. Audio engineering by Juan Carlos Torrado with an assist from Gary O’Keefe here in New York. Ellen Rolfes writes our newsletter. Thalia Menchaca is our intern.

Kristin Schwab 

Marissa Cabrera is our senior producer. Bridget Bodnar is the director of podcasts. And Francesca Levy is executive director of Digital.

Kimberly Adams 

You really have this timing down.

Kristin Schwab

I’ve been practicing you.