Connecticut Gov. Ned Lamont last week signed a bill into law that will prohibit healthcare providers from reporting medical debt to credit agencies and void debt that is reported to credit bureaus. The bill is scheduled to go into effect on July 1.
What it Says: The bill prohibits Connecticut healthcare providers, hospitals, and entities affiliated with hospitals from reporting any medical debt to credit agencies for use in credit reports. The bill also mandates that healthcare providers include clauses in their contracts with collection entities that prevent the reporting of medical debt to credit agencies.
- According to the bill, medical debt encompasses obligations related to health care services, products, or devices. However, it does not include debt charged to regular credit cards unless those cards are specifically designated for medical expenses. The law will not void the debt, and healthcare providers can still pursue other avenues for collecting outstanding amounts.
What He Said: “When medical debt is included in a person’s credit report, creditors are making decisions based on a person’s medical history that is not necessarily representative of their financial responsibility and household finances,” Governor Lamont said. “By prohibiting medical debt from being reported to creditors, we are protecting patients who may have otherwise been apprehensive about seeking essential medical care.”
- The bill was supported by the Consumer Financial Protection Bureau and the Connecticut Hospital Association, according to the governor’s office.
- Connecticut joins Colorado as states that have outlawed the credit reporting of medical debt. Other states are working on different versions of credit reporting bills or other bills aimed at protecting consumers from healthcare and medical debts.
- Earlier this year, Gov. Lamont announced a plan to use state funds to purchase and cancel $650 million of medical debt for 250,000 residents of the state.
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