Why Removing Medical Debt on Credit Reports Helps Trans & GNC People

Starting July 1st, the Big Three credit bureaus (Equifax, Experian, and Transunion) began to implement a policy to remove paid medical debts from consumers’ credit reports. Additionally, the bureaus will not report new medical debt until one year after it goes to collections, and starting in 2023 the bureaus will stop reporting medical debts under $500 altogether. These important changes will help the 23 million people in the United States who have medical debt. The new policies will also have a significant benefit for transgender and gender non-conforming people, who often have to incur medical debt to afford their needed gender affirming care.

Costs for Gender-Affirming Treatments

As with other medical interventions in the United States, there are significant costs for obtaining gender-affirming treatments and care that consumers are expected to privately shoulder.  The cost of hormone treatments, which between 75-78% of those seeking gender affirming care choose to take and must continue to take for the rest of their lives, can run up to $2,000 annually

The cost of gender-affirming surgeries varies depending on the surgery and the medical provider. Current estimates for top surgeries for male-to-female patients currently place the costs to be about $9,000, and bottom surgery to cost about $25,600. For female to male patients, the cost for top surgery are estimated to range from $7,800 to $10,900 (depending on the amount of skin reduction), and bottom surgery costs around $24,900. Additional medical procedures may also be part of a persons gender affirming care during their transition, including hair removal, facial masculinizing or feminizing procedures, and body sculpting surgeries. 

Methods of Paying for Care

However, transgender and gender non-conforming people are less likely to have insurance that covers the costs of these medicines and medical procedures. One in five transgender adults in the United States are uninsured (19%), and those with insurance may find that their insurer does not cover the cost of their gender-affirming care. 

Absent insurance, patients must pay out of pocket for the care that they need. But transgender people are more likely to lack the income or savings in order to pay for medical care using cash on hand: 29% transgender people live in poverty, and transgender people are 4x more likely to earn less than $10,000 a yearWithout insurance or cash on hand to pay for care, trans and gender non-conforming folks must rely on medical debt and other credit in order to pay for their gender-affirming care, and other needed medical care.

Negative Effects of Medical Debt

The reporting of medical debts on a consumer’s credit report can have significant effects on a persons wellbeing. The appearance of a debt that is in collections on the report, and drop in score that results, can affect a persons eligibility for credit, housing, and jobs. 

Inability to obtain loans or credit cards can hinder a consumers’ ability to structure their finances, and can force them to turn to alternative financial services like payday loans in order to afford necessities. Seeing a bill in collections on a credit report might lead a landlord or mortgage lender to turn a consumer down, affecting their ability to find affordable and secure housing. And an employer might refuse to hire someone with collections, making it more difficult for them to make enough money to support themselves.

For trans and gender non-conforming people–who already experience discriminatory obstacles to credit, housing, and employment–the appearance of collections on their reports from their gender-affirming care adds another unfair burden that can prevent them from qualifying for loans, homes, or jobs.

The Takeaway

The credit bureaus’ new policies to cease reporting paid medical debts, delay reporting new medical debts for one year, and to stop reporting small medical debts less than $500 will help those trans and gender non-conforming folks who struggle to afford necessary gender-affirming care. 

CLEAR applauds these important changes by the credit bureaus to support consumers struggling with medical debt, and encourages them to continue to explore ways to minimize the financial burden of debts consumers incur for the healthcare they need.