Merkley Reintroduces Bill to Provide Relief to Americans Struggling with Medical Debt

The Medical Debt Responsibility Act will prohibit consumer credit agencies from using paid off or settled medical debt collections in assessing a consumer’s credit worthiness.

(WASHINGTON DC) - Oregon’s Senator Jeff Merkley reintroduced legislation yesterday that will prohibit companies from using paid off or settled medical debt in assessing consumer credit scores. The Medical Debt Responsibility Act will assist approximately 72 million Americans affected by medical bill problems and medical debt.

“Medical debt is not a great predictor of a person’s credit-worthiness, and folks should not be shackled from getting loans to start businesses or buy their dream home because they got very sick,” Merkley said. “We can’t see the future to plan ahead for medical emergencies, but we can stop them from damaging our working families’ credit scores for years in the future.”

“Unresolved medical debt bills, including bills stuck in insurance red tape that have not even been received by the consumer, are often provided to credit reporting agencies and can negatively impact consumers’ credit scores for years,” said Senator Dick Durbin (D-IL). “Even once the debts are paid in full, credit ratings can still be affected. After a sudden illness or medical emergency and the skyrocketing cost of critical treatment, the last thing families should have to deal with is a plummeting credit score. Our legislation will help put a stop to this unfair practice.”

Currently, even medical debt collections that have been completely paid off or settled can still significantly damage a consumer’s credit score for years. As a result, consumers can be denied credit or pay higher interest rates when buying a home or obtaining a credit card. Because many medical bills are submitted first to insurance companies, consumers often do not learn that they are responsible for a medical bill until they hear from a collection agency, by which time their credit score has already suffered.

The Medical Debt Responsibility Act will fix this inequity by prohibiting consumer credit agencies from using paid off or settled medical debt collections in assessing a consumer’s credit worthiness. In addition, the bill will require the creditor or credit rating agency to expunge the medical debt from the consumer’s record within 45 days from the day it is paid off or settled.

Along with Durbin, the bill is cosponsored by Senators Sherrod Brown (D-OH), Chuck Schumer (D-NY), Tom Harkin (D-IA), and Bob Menendez (D-NJ) and endorsed by the Consumers Union.

Salem-News.com Top Stories

2025: Hope for the Best, Prepare for the Worst

Two Wars with No Way Out

No One Owns the Future

The Ugly Origins of Trump's America First Policy

A One-State Solution Could Transform the World

Comments Leave a comment on this story.

All comments and messages are approved by people and self promotional links or unacceptable comments are denied.

Patient Advocate March 12, 2012 12:02 pm (Pacific time)

This legislation in the state of Oregon is just the latest point in a general trend of establishing that medical debt is not like other kinds of debt. Simply put, a medical debt does not indicate that a household has been a poor borrower in the past, or is likely to default on other kinds of debt. In fact, the latest report from the CDC indicates that one in five families have a challenge paying medical bills while one in ten do not have the resources to pay at all. Individuals without healthcare have grown as has the number of people who are underinsured. What medical debt increasingly shows is that some individual has had the bad luck to get sick at a particular time, in a particular place, or relative to some arbitrary conditions that can be complex in a vast network of private state insurance companies, government entitlement programs, and other potential payors. That’s why state legislators are increasingly looking at how to view medical debt differently in terms of a person’s overall credit score. This goes along with more patient education, consumer advocacy, and transparency to help those who have been negatively impacted by extreme medical debt in a given state.

Anonymous March 3, 2012 9:37 am (Pacific time)

You in Oregon should take a look who owns the lion share of rentals, who also owns the largest property management companies (it's the same in all states). It is an open records in Oregon for registered voters ID, and you can cross index the owners and managers...you will see the majority are registered democrats. Conservatives are those who provide a hand-up to help foster independence, and our opposites are those who provide hand-outs fostering more dependence. It is always the liberals who use other people's money, never their own. As per IRS records you can also see the largest charity donations come from non-liberals. Those who like to create the stereotype of fat cat white people are wrong, on purpose? You will also see the largest number of veterans are also non-liberals. You have your way of life because of non-liberals, and our ideology has made our country great. It has always been liberals who have created an atmosphere of division and anger. Sen. Merkley has the beginning of a good idea, except that if you get a free ride with your credit record because of an arrearage (or bankruptcy) for medical bills, then many people will devote their cash resources elsewhere. In the end the medical community will be losing big time, expenses go up and so do their rates. In time less and less medical services are available and people wait longer for services. Think it down the line regarding cause and effect. Personal self-responsibility is the corner stone of American success. For those who cannot pay, there are remedies, but why should the majority be harmed when a very few are gaming the system. It is far better here in the states waiting or medical care than say Canada or Europe, otherwise, why do their wealthy folks come here for medical when they can?

Anonymous March 2, 2012 6:53 pm (Pacific time)

I am a registered democrat and voted for Obysmal. Renting is a business, not charity. Maybe you people on section 8 and food stamps just think the world owes you a living? Go out and test the average government worker for basic skills and see how programs started nearly 50 years ago has generated some of the most incompetent workers, some making over $100,000 a year, and still they do not know how to prioritize their expenses. Like paying for a roof over their head and getting food for their kids. Yeah, these are the kinds of deadbeats who get evicted all the time. I feel bad for their kids, but generation after generation ends up modeling the preceeding generation. If they are veterans I help them, but then again the bank expects payment, so why should I put my family in a bad situation? In the not too distant future there will only be government housing for some of these people, and we all see how that works in densely populated areas. I imagib=ne the editor here gets all your service for free and need not worry about your cash flow. God will provide?

Anonymous March 2, 2012 3:10 pm (Pacific time)

This is actually a good idea, but we should make sure that the people have excellent creit reports prior to the medical/dental problems. I generally evict over 30 families a year from my rentals because of fraud on their apps, and I need to have good financial information before renting. It just breaks my heart to kick families with kids out into the streets, but I also have expenses and the banks will certainly show me no mercy. Private citizens and the government should operate in the same fashion. No charity, let the mosques do that. allahha akbar

Editor: A true conservative slum lord speaks, and yes, God is Great!

[Return to Top]