In response to a new law enacted last month in New York, one of the three major credit reporting agencies has announced it will no longer include any medical debt for residents of the Empire State on their credit reports. The move affects 2.2% of the total amount of medical debt, according to the company.
The Background: The new law that was enacted in New York bans the credit reporting of medical debt, but only when the healthcare professional, hospital, or ambulance service is licensed by the state. Healthcare facilities that are not licensed by the state are not subject to the statute.
- But since it’s impossible to know if and when a furnisher or healthcare provider is licensed, the credit reporting agency in question — Experian — has decided to remove all New York medical debts.
- “To comply with recently enacted New York law, Experian will no longer display identifiable Medical Debt Data for consumers who reside in the State of New York, effective December 13, 2023,” the company announced earlier this week in an email to furnishers and customers. “We suggest that your organization determine what impacts these changes will have on your processes, if any.”
What This Means: The trend to de-emphasize medical debt on consumers’ credit reports will likely continue into 2024. New York and Colorado have already enacted laws banning the reporting of medical debts, and other states are sure to follow. The Consumer Financial Protection Bureau is also expected to continue moving forward with its rule on removing medical debts from consumers’ credit reports.
- Furnishers are besieged on all sides by those seeking to protect consumers from the scourge of medical debts. But these moves, like many that have been made and proposed, do not address the root cause of the issue — the cost of healthcare and issues with health insurance.
