Ricks Bill to Protect Patients from Credit Report Impacts of Medical Debt Passes Committee

DENVER, CO - The House Business Affairs & Labor Committee today unanimously passed legislation to prohibit medical debt from being included in a credit report or credit score, protecting Coloradans from facing additional financial barriers due to outstanding medical expenses.

“One in eight Coloradans have medical debt that impacts their credit score, making it harder for people to qualify for housing, employment, and lower interest rates,” said Rep. Naquetta Ricks, D- Aurora. “One in five Coloradans of color have medical debt, and other marginalized groups like lower-income, people with disabilities, rural, uninsured, and LGBTQ+ communities also disproportionately suffer from poor credit scores due to systemic inequities. This bill removes barriers so Coloradans don’t have to choose between their financial stability and their health and well-being.”

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.