California

Attorney General Aty. Gene.

Rob Bonta announced Monday he will back legislation to prevent medical debt from appearing on consumer credit reports, a Democratic-led effort to provide protections for patients pressured by health care bills.

Bonta is a sponsor of Senator Monique Limns’ bill, SB 1061, which aims to prevent healthcare providers, as well as any contracted collection agency, from sharing a patient’s medical debt with credit reporting agencies. It would also prevent credit reporting agencies from accepting, storing or sharing information about medical debt. Medical debt is not necessarily an accurate reflection of credit risk, and its inclusion on credit reports can lower credit scores and make it difficult for people to find a job, rent an apartment or get a car loan.

This is a broken part of our current system that needs to be fixed, Bonta, a Democrat, told KFF Health News. This is California’s opportunity, and we relish the ability to lead on important issues.

If passed, California would become the third state to remove medical bills from consumer credit reports, following Colorado and New York in 2023. Minnesota has a proposal to do the same.

Last year, the Biden administration announced plans to develop similar federal rules through the Consumer Financial Protection Bureau, but they have yet to be released. And should be a former president

Donald

If Trump returns to the White House, he would have the prerogative to overturn the rules.

Opinion: California wants to make your health care cheaper

Limn said it is important for the state to enshrine its own protections into law in addition to federal pressure. We may have to wait a long time for results that California could potentially deliver in the coming year, says Limn (D-

Santa Barbara Goleta

) said.

Bonta said he’s not sure what kind of opposition to the bill to expect, but he wonders

as if

providers and collection agencies will resist.

An analysis by KFF Health News found that credit reporting threats are the most common collection tactic used by hospitals to get patients to pay their bills. For example, a hospital might worry that a ban on credit scores could make it more difficult to get patients to pay for the medical care they have already received.

The three largest U.S. credit agencies, Equifax, Experian and TransUnion, have said they will stop including certain medical debts on credit reports starting in 2022. The excluded debts include paid-off bills and debts of less than $500, but the agency’s voluntary actions are left out. millions of patients with larger medical bills on their credit reports.

Limn said she often hears from voters about the

impact effects

have medical debts on their lives.

Medical debt is disappearing from U.S. credit reports, causing scores to rise

According to the California Health Care Foundation, medical debt disproportionately affects low-income, Black and Latino Californians.

And increasingly, people with a healthy income, who often have health insurance, are incurring medical debt. A KFF Health News-NPR investigation found that about 100 million people nationwide are saddled with medical debt, forcing some to give up their homes, ration food and take on extra work.

Although the legislation does not cancel medical debt, Limn said she hopes it will encourage people to seek medical care when they need it.

You hear so many people now who are worried about getting medical care because they can’t afford it and are instead waiting for it to get worse, Limn said. If the law passes, we will see less fear and more people will receive medical care.

KFF Health News,

Formerly known as Kaiser Health News, is a national newsroom that produces in-depth journalism on health issues.