Robert Menendez

05/21/2019 | Press release | Distributed by Public on 05/21/2019 14:49

Menendez Introduces Legislation to Restore Patients’ Credit Opportunities

Menendez Introduces Legislation to Restore Patients' Credit Opportunities

Menendez Introduces Legislation to Restore Patients' Credit Opportunities

Tuesday, May 21, 2019

WASHINGTON, D.C. - U.S. Senator Bob Menendez today introduced the Medical Debt Relief Act of 2019, to ensure Americans' credit scores are not left in ruin simply because they had the misfortune of needing costly medical care.

'All the financial planning in the world can't prepare a family for a sudden medical emergency or unforeseen illness -- and the bills that come with them,' said Sen. Menendez. 'And these consumers shouldn't be denied credit or be forced to shell out more money in interest payments just because they got sick or injured. That's not fair. And we need to fix it. We're introducing the Medical Debt Relief Act to keep medical debt from continuing to harm consumers' credit scores even after it has been paid off or settled.'

One in six Americans has a past-due health care bill on their credit report, and medical debt is the number one reason why Americans file for bankruptcy. Medical debt can often be a significant financial burden that, unlike credit card debt or loans that consumers take on willingly, is a result of an unexpected accident or illness outside of the consumer's control.

Many consumers don't realize that medical debt can cause significant long-term damage to their credit scores. But once unpaid medical bills are assigned to collections, they result in derogatory marks that can scar credit scores for years.

The Medical Debt Relief Act would defer derogatory marks on credit scores for medical debt collection by one year, giving patients time to pay their medical bills before their records are affected. During this one year-year period, a consumer may communicate with an insurance company to determine coverage for the debt, and apply for financial assistance. In addition, the Medical Debt Relief Act will prohibit consumer reporting agencies from reporting an individual's medical debt for one year. This means consumers will have one year to settle or pay medical debts without reporting the debt to a reporting agency.

This legislation also requires all paid-off or settled medical debt to be removed from consumers' credit reports and credit scores, ensuring that consumers hit by difficult medical expenses aren't haunted by their medical debt for years after it's been paid off.

The bill is cosponsored by Sens. Jeff Merkley (D-Ore.), Richard Blumenthal (D-Conn.), Dianne Feinstein (D-Calif.) and Elizabeth Warren (D-Mass.).

This legislation is also supported by the National Consumer Law Center (NCLC) and the National Patient Advocacy Foundation (NPAF).