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February 28, 2023

House Passes Consumer Protections Against Medical Debt

DENVER, CO - The House today passed legislation limiting medical debt from impacting patients’ credit reports or credit scores. It passed by a vote of 46-18. 

“Over 700,000 Coloradans have medical debt that negatively impacts their credit scores, making it harder to access housing, employment and affordable interest rates,” said Rep. Naquetta Ricks, D-Aurora. “This bill protects consumers with medical debt so that it doesn’t prevent them from renting an apartment or applying for a job, small business loan, credit card, or a basic cell phone plan. This bill will protect Coloradans from having their entire life impacted by outstanding and often unexpected medical debt.”

Often medical expenses come as a surprise to many patients, leaving people unable to plan for expensive bills. Currently, when someone can’t afford a medical expense, the bill is sent to collections, and that information is shared with consumer reporting agencies that generate consumer reports and credit scores that are often used by banks, landlords, employers, and insurance and utility companies. Medical debt lowers the consumer’s credit score, creating a barrier to accessing necessities like housing, utilities, and loans. Lower credit scores also increase interest rates on loans, taking more money out of Coloradans’ pockets. Medical debt affects people of all ages and incomes, but it disproportionately impacts those with a chronic illness or medical condition who relies on continual medical assistance to maintain their quality of life.

HB23-1126 adds medical debt to the list of information that consumer reporting agencies are not allowed to include in a credit report, updates exemptions to expand consumer privacy protections, and requires collectors and collecting agencies to notify Coloradans that medical debt will no longer be included in credit reports.

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