Source: United States House of Representatives – Representative Brad Schneider (D-IL)
WASHINGTON, DC – Today, Congressman Brad Schneider (IL-10), a member of the House Ways and Means Committee, and Congresswoman Terri Sewell (AL-07) and Congresswoman Alexandria Ocasio-Cortez (NY-14), Co-Conveners of House Democrats’ Cost of Living Healthcare Working Group, led 52 of their House Democratic colleagues in urging Health and Human Services Secretary Robert F. Kennedy Jr. and Centers for Medicare and Medicaid Services Administrator Dr. Mehmet Oz to rescind a final rule that allows health insurance companies to offer loans to Affordable Care Act enrollees to cover their deductibles and other medical costs. This rule will place health insurers in a new role as loan officers, potentially allowing these companies to subject patients to predatory interest rates or condition care on patients’ ability to pay back their loans.
In June, the New York Timesreported on the rule and the strain many Americans are already dealing with as insurance premiums and healthcare costs rise, highlighting that 36% of U.S. households have medical debt.
“Every American should have quality, affordable healthcare with providers they know and trust when and where they need it,” said Schneider. “Sadly, thanks to President Trump and Congressional Republicans’ refusal to extend the ACA tax credits, millions of families have lost access to healthcare, and millions more have seen their healthcare costs skyrocket this year. We should be working together on solutions that lower costs and expand access to care. Instead, the Trump Administration is inviting insurers to profit off of our nation’s growing medical debt crisis. The Administration must rescind this predatory rule and better focus on advancing policies that make healthcare more accessible, more affordable, and more sustainable for American families.”
“The Trump Administration and Congressional Republicans have spent the past year making health care more expensive for American families—allowing ACA premium tax credits to expire, driving up premiums, and stealing coverage from more than a million Americans,” said Sewell. “Now, instead of fixing the problem they created, they’re encouraging insurance companies to offer loans to patients who can’t afford sky-high deductibles. This policy will push more Americans deeper into medical debt, forcing them to borrow money just to access the care they need. Every American deserves affordable, quality health care they can count on, not a system that profits from families’ financial hardship. As Co-Convener of House Democrats’ Cost of Living Healthcare Working Group, I’ll keep fighting to lower costs and put patients first.”
“100 million Americans are currently living under the weight of medical debt and now the Trump administration is proposing making the load even heavier,” said Ocasio-Cortez. “This will only further entrench working families in a never-ending cycle of medical debt, and could lead health insurers to require repayment before people can renew their insurance plans or receive the care they need.”
“Since this Administration allowed the Affordable Care Act (ACA) enhanced tax credits to expire at the end of last year, there has been a 58% average increase in out-of-pocket premiums in 2026 per person,” the lawmakers wrote. “This trend is expected to continue as rates are set for 2027, with a recent analysis indicating a median proposed premium increase of an additional 14%. This cost increase, adding to an already intense affordability crisis, has resulted in 1.2 million Americans losing health coverage all together.”
“Ultimately, this Administration has deliberately constructed plans with deductibles that most enrollees cannot afford to pay and is allowing the same insurer who sold the unaffordable plan to offer the enrollee a loan to cover the gap, presumably with interest, and under terms established entirely by the issuer,” the lawmakers continued. “Health insurance was designed to help families during their darkest moments, not profit off denying Americans care and perpetuating prolonged illness. This policy incentivizes health plans to profit off their own enrollees’ medical debt, not provide Americans adequate health coverage.”
View the full letter text here and below.
Dear Secretary Kennedy and Administrator Oz:
We write to express serious concern about the Health and Human Services (HHS), through the Centers for Medicare & Medicaid Services (CMS), “HHS Notice of Benefit and Payment Parameters for 2027” final rule that encourages issuers of catastrophic health plans to provide enrollees with loans to cover their deductibles and other cost-sharing obligations.
We find this to be a profound conflict of interest when an insurer acts simultaneously as a health plan and as a creditor to that same plan’s enrollees. At a time when 36 percent of households in the United States are saddled with medical debt, this provision in the final rule raises fundamental questions about the purpose of adequate healthcare coverage and consumer protection.
Since this Administration allowed the Affordable Care Act (ACA) enhanced tax credits to expire at the end of last year, there has been a 58% average increase in out-of-pocket premiums in 2026 per person. This trend is expected to continue as rates are set for 2027, with a recent analysis indicating a median proposed premium increase of an additional 14%. This cost increase, adding to an already intense affordability crisis, has resulted in 1.2 million Americans losing health coverage all together.
Since the expiration of enhanced premium tax credits, the Administration has pursued a deliberate policy of steering Americans away from comprehensive coverage and toward high-deductible catastrophic plans. The annual deductible for covered services in a catastrophic plan is an astronomical $10,600 for an individual or $21,200 for a family, over five times the average deductible for job-based coverage.
Against this backdrop, CMS states in the final rule: “issuers of catastrophic plans could consider financing the deductible by providing enrollees a loan. To the extent permitted by applicable Federal and State law, this could be especially helpful for enrollees who, before reaching their deductible, incur a large amount of medical costs within a short period of time.”
When an insurer acts simultaneously as a health plan and as a creditor to that same plan’s enrollees, a profound structural conflict of interest arises. The insurer’s interest in maximizing loan repayment, including interest income, is directly at odds with its obligation to provide affordable, timely coverage. This policy will result in enrollees being caught between delayed care and mounting debt, with the same entity on both sides of that equation. Considering more than one-third of American households already carry medical debt, adding an insurer-issued loan product to that burden risks conflating a coverage gap into a debt trap.
The ACA was built on the principle that insurance should provide genuine financial protection, not merely nominal coverage. A plan that requires a family to pay $21,000 before benefits are triggered is not insurance in any meaningful sense, it is a mechanism for transferring risk from the insurer to the patient while collecting premiums in return. In addition to the lack of adequate coverage, the Administration has created a pathway for the same industry intended to provide healthcare coverage to now operate as a bad faith lender to “assist” families to pay off the medical debt manufactured by bad faith policy.
Ultimately, this Administration has deliberately constructed plans with deductibles that most enrollees cannot afford to pay and is allowing the same insurer who sold the unaffordable plan to offer the enrollee a loan to cover the gap, presumably with interest, and under terms established entirely by the issuer. Health insurance was designed to help families during their darkest moments, not profit off denying Americans care and perpetuating prolonged illness. This policy incentivizes health plans to profit off their own enrollees’ medical debt, not provide Americans adequate health coverage.
In light of these concerns, we respectfully request that HHS, through CMS, provide written answers by July 31, 2026:
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Clarify in sub-regulatory guidance whether and how insurer-issued deductible financing products will be subject to the same state medical debt consumer protection standards that apply to other medical debt holders (e.g., health systems and third-party debt collectors) in a given state, including:
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interest rate caps;
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disclosure requirements;
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prohibitions on mandatory arbitration clauses; and
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what consumer protection standards, if any, CMS intends to establish at the federal level given that no such standards currently exist for this product type.
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Confirm whether CMS consulted with the Consumer Financial Protection Bureau (CFBP) in developing this provision. Specifically, disclose any comments provided by the CFBP or justify reasoning for not consulting the CFBP;
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Provide any actuarial or economic analysis CMS conducted regarding the likely impact of this provision on enrollees’ total out-of-pocket costs, including loan repayment obligations;
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Provide a detailed description of what recourse is available to enrollees who are offered loan terms they cannot meet, and which agencies at both the federal and state level have the responsibility of overseeing an insurer-issued loans.
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Clarify that issuers cannot condition plan enrollment or renewal on acceptance of a financing arrangement or failure to repay a deductible financing loan.
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Provide a detailed description of what recourse is available to enrollees who are offered loan terms they cannot meet and whether issuers plan to condition plan enrollment or renewal on acceptance of a financing arrangement denoting consequences against enrollees who are unable to repay a deductible financing loan, including:
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Structuring loans as secured debt requiring collateral,
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Pursuing civil judgments against enrollees and subsequently attaching judgment liens to real property, including a primary residence,
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Pursuing wage garnishments,
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Referring unpaid loans to third-party debt collectors or reporting debt to consumer credit bureaus.
American families across this country deserve health insurance that provides genuine protection, not plans that shift catastrophic financial risk onto patients and then offer debt as the reward. We urge the HHS to withdraw this ill-conceived provision. We appreciate your prompt attention to this issue.