Legislators in several states are advancing medical debt protections, even as the Consumer Financial Protection Bureau maintains that states cannot regulate consumer credit reports, KFF Health News reported Dec. 19.
Legislators in Alaska and Michigan are working to advance bills that would remove medical debt from consumer credit reports. The attorneys general of California and Colorado have pledged to uphold credit laws enacted in recent years, despite a lawsuit in Colorado from debt collectors challenging such laws.
Meanwhile, lawmakers in Indiana and Ohio have dropped proposals to remove medical debt from credit reports, but are moving forward with other patient protections for those unable to pay medical bills, KFF Health News reported.
The CFPB said in October that the Fair Credit Report Act “generally preempts State laws that touch on broad areas of credit reporting, consistent with Congress’s intent to create national standards for the credit reporting system.”
Eight days later, debt collectors filed a lawsuit challenging Colorado’s 2023 credit reporting law, the first to require the removal of some or all medical debt from credit reports. Colorado Attorney General Phil Weiser, a Democrat, said his office will “strongly oppose all efforts to strip away critical medical debt protections,” according to a statement shared with KFF Health News.
California Attorney General Rob Bonta, also a Democrat, said in a Nov. 13 news release that the state’s credit law remains in effect.
“I urge consumers to understand their rights and to regularly check their credit reports to ensure medical debt does not make an appearance,” Mr. Bonta said. “The California Department of Justice is committed to protecting and enforcing all of California’s laws — including this one.”
Beyond legislation, states have taken steps to cancel medical debt. In October, North Carolina’s medical debt relief program reported eliminating more than $6.5 billion in medical debt for 2.5 million residents over the past year. All 99 of the state’s eligible hospitals opted into the program.
Also in October, New York City said it had canceled nearly $135 million in medical debt for more than 75,000 residents. The move is part of a broader effort to eliminate $2 billion in debt for 500,000 residents.
Both New York City and North Carolina partnered with Undue Medical Debt, which has also worked with health systems such as New Orleans-based Ochsner Health and Greenville, N.C.-based ECU Health to relieve patient debt.
