Senator Jeff Merkley (D-OR) has introduced the Medical Debt Responsibility Act. The bill, cosponsored by six other Senators, would prohibit credit bureaus from considering medical-related debt collection activities in compiling credit scores, providing the bill has been paid or settled. In addition, it would mandate that the creditor or credit bureau remove the medical debt from a person’s credit report within 45 days of payment or settlement.
The Senators say that the rationale for the legislation is that medical debt collection impacts a consumer’s credit report for years, even though medical debt is different than other types of debt. According to a press release issued by Senator Merkeley’s office, “The bills are often submitted first to insurance, and it can take considerable time to determine the accurate amount actually owed by the consumer. Consumers must navigate a complex and confusing billing system and wait for decisions from one or more insurance companies to find out how much they owe. For this reason, consumers often do not learn that they are delinquent on a medical bill until they hear from a collection agency, by which time their credit score has already suffered.”
It goes on to say that medical debt is a poor predictor of a consumer’s creditworthiness, since consumers don’t have control over whether to incur the debt or how much debt they will incur.