California medical debt reporting ban takes effect: 4 things to know

A new California law took effect Jan. 1 that bars health providers and debt collectors from reporting medical debt information to credit agencies, CalMatters reported. 

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Four things to know:

1. Under the new law, medical debt will no longer be included on consumers’ credit reports. The law also prohibits using any medical debt listed on a credit report when making credit decisions. 

2. In California, an estimated 38% of residents carry some type of medical debt, according to the report. More than half of low-income residents in the state carry medical debt. 

3. The new law does not apply to debt charged on a medical credit card or a general credit card, according to the report.

4. Other states, including New York and Colorado, have enacted similar laws, according to the report. 

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