Illinois Gov. JB Pritzker last week signed two bills into law — one aimed at erasing $1 billion in medical debt and the other prohibiting the inclusion of medical debts on credit reports. The objective of the new laws is to alleviate the financial burden of medical debt on Illinois residents.
Why it Matters: The new laws will erase nearly $1 billion in medical debt for over 340,000 low-income Illinois residents and prohibit reporting of medical debt on credit reports, significantly impacting how medical debts can be collected and reported.
The Big Picture: States and federal regulators are increasingly taking action to shield consumers from the financial impacts of medical debt. This trend poses challenges for creditors and collectors dealing with unpaid medical bills. Illinois is the latest state to enact a law prohibiting the reporting of medical debts on consumers’ credit reports.
The Details: SB2933 was introduced in late January by state Sen. Steve Stadelman, a Democrat who has been in the state legislature since 2012.
What It Does: The bill defines medical debt as a debt arising from the receipt of health care services, products, or devices. Medical debts do not include debts charged to a credit card or an open-end or close-end extension of credit made by a financial institution to a borrower unless the open-end or close-end extension of credit may be used by the borrower solely for the purpose of the purchase of healthcare services.
- Both bills took immediate effect upon signing.
The Last Word: “No Illinoisan should face financial ruin after receiving the medical care they need,” said Gov. Pritzker. “These two pieces of legislation work to ensure that medical debt is not a lifetime sentence of poverty.”
