✅Exclude medical debt from credit reports
WHAT THE BILL WOULD DO
SB 1061 by Sen. Monique Limón would remove medical debt from credit reports and prohibit debt collectors from reporting patients’ medical debt information to credit agencies. This pertains specifically to debt owed to a medical provider, such as a hospital or a doctor’s office, and not medical debt charged to credit cards.
WHO SUPPORTS IT
The bill is backed by Attorney General Rob Bonta, the California Nurses Association and a number of consumer advocacy organizations.
WHO IS OPPOSED
The bill was originally opposed by a coalition of bankers and creditors that pushed back on the bill’s definition of “medical debt” because it included medical credit cards, which are often offered at doctors’ and dentists’ offices as a way to pay for a procedure, but also can be used to pay for elective services, fitness programs and even veterinary services. That kind of debt, these groups argued, should not be hidden from lenders. The coalition removed its opposition once the bill redefined medical debt to that owed directly to providers.
WHY IT MATTERS
About 4 in 10 Californians report carrying some type of medical debt, according to the California Health Care Foundation. Medical debt can significantly weigh down credit scores and hurt consumers’ chances at securing a rental, a mortgage or car loan.
GOVERNOR’S CALL ✅
Newsom announced Sept. 24 he signed the bill, along with other consumer bills. “Nobody wants to get ripped off, whether it’s a small subscription fee that’s seemingly impossible to cancel or massive medical debts which force families into financial ruin.”