State lawmakers in Wyoming have struck down a bill that would have prohibited the inclusion of medical debt on consumers’ credit reports, acknowledging many of the exact arguments that have been used elsewhere in opposition to such proposals.
Driving the news: House Bill 195, introduced by Rep. Karlee Provenza, a Democrat, sought to ban medical debt from being included in credit reports. The proposal aimed to prevent individuals from facing long-term credit damage due to medical expenses, with violators facing potential civil penalties.
- Rep. Provenza, citing personal experience, argued that medical debt can have lasting consequences, affecting consumers’ ability to secure housing, car loans, and other financial opportunities.
- The committee rejected the bill in a 5-3-1 vote, choosing instead to focus on systemic issues like the high cost of healthcare and Wyoming’s uninsured rate.
By the numbers
- 15% of Wyomingites have medical debt, with a median amount of $1,500 in collections.
- One in three Americans carries medical debt, impacting credit scores and financial stability.
- In 2021, consumers held more than $88 billion in medical debt on their credit reports.
- 58% of debt collections on credit reports were medical, according to the Consumer Financial Protection Bureau.
The big picture: The bill faced split testimony from industry groups, including the Wyoming Hospital Association, AARP Wyoming, and the Leukemia and Lymphoma Society. Opponents raised concerns that banning medical debt reporting would hinder lenders’ ability to assess creditworthiness and could financially strain hospitals.
- Hospitals absorb roughly $140 million annually in uncompensated care, and some fear that restricting credit reporting would make it harder for providers to recover payments.
- Wyoming’s uninsured rate is 12.9%, higher than the national average of 9.5%, making medical debt a persistent issue in the state.
- Health care advocates argue that addressing the root causes of medical debt — including expanding Medicaid and reforming high-deductible insurance plans — would be more effective than restricting credit reporting.
What they’re saying
- Josh Hansen, Wyoming Hospital Association: “We’re the only part of the healthcare sector that provides services regardless of ability to pay. Insurance companies, drug manufacturers, and medical device companies all get their money, but hospitals shoulder the burden.”
