IN THE SENATE OF THE UNITED STATES
March 1, 2012
Mr. Merkley (for himself, Mr. Brown of Ohio, Mr. Durbin, Mr. Menendez, Mr. Schumer, and Mr. Harkin) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs
To exclude from consumer credit reports medical debt that has been in collection and has been fully paid or settled, and for other purposes.
This Act may be cited as
Medical Debt Responsibility Act of
Findings and purpose
Congress finds that—
medical debt is unique, and Americans do not choose when accidents happen or when illness strikes;
medical debt collection issues affect both insured and uninsured consumers;
according to credit evaluators, medical debt collections are more likely to be in dispute, inconsistently reported, and of questionable value in predicting future payment performance because it is atypical and nonpredictive;
nevertheless, medical debt that has been completely paid off or settled can significantly damage the credit score of a consumer for years;
as a result, consumers may be denied credit or pay higher interest rates when buying a home or obtaining a credit card;
healthcare providers are increasingly turning to outside collection agencies to help secure payment from patients, coming at the expense of the consumer, because medical debts are not typically reported unless they become assigned to collections;
in fact, medical bills account for more than half of all non-credit related collection actions reported to consumer credit reporting agencies;
the issue of medical debt affects millions of consumers;
according to the Commonwealth Fund, medical bill problems or accrued medical debt affects roughly 73,000,000 working-age adults in America; and
in 2010, 30,000,000 working-age American adults were contacted by a collection agency for unpaid medical bills.
It is the purpose of this Act to exclude from consumer credit reports medical debt that had been characterized as debt in collection for credit reporting purposes and has been fully paid or settled.
Amendments to fair credit reporting Act
Medical debt defined
Section 603 of the Fair Credit Reporting Act (15 U.S.C. 1681a) is amended by adding at the end the following:
The term medical debt means a debt described in section 604(g)(1)(C).
Exclusion for paid or settled medical debt
Section 605(a) of the Fair Credit Reporting Act (15 U.S.C. 1681c(a)) is amended by adding at the end the following:
Any information related to a fully paid or settled medical debt that had been characterized as delinquent, charged off, or in collection which, from the date of payment or settlement, antedates the report by more than 45 days.