A group of Senators on Monday reintroduced the Medical Debt Responsibility Act, a bill that would place limits on consumer medical debt reporting.
The bill, which did not advance out of committee last year, includes language requiring credit bureaus to delete reports of delinquent medical debt lower than $2,500 within 45 days of resolution.
The bill now has been introduced in Congress three times. It received a hearing last year by the House Committee on Financial Institutions and Consumer Credit. It was introduced this time by Dick Durbin (D-Ill.), Robert Menendez (D-N.J.), Jeff Merkley (D-Ore.), Chuck Schumer (D-N.Y.), Richard Blumenthal (D-Conn.), Tom Harkin (D-Iowa) and Sherrod Brown (D-Ohio).
According to the bill's sponsors: "Medical debt is atypical because consumers have little choice over whether to incur medical expenses or how much debt they accrue. Due to this unique nature of medical debt, its predictive value on credit reports is low … The Medical Debt Responsibility Act fixes this problem by prohibiting consumer credit agencies from using paid off or settled medical debt collections in assessing a consumer’s credit worthiness."
The Medical Debt Responsibility Act already has been endorsed by the American Medical Association, Mortgage Bankers of America, NAACP, Consumers Union and the National Home Builders Association.
"[Medical] bills are often submitted first to insurance, and it can take considerable time to determine the accurate amount actually owed by the consumer," the sponsors continue. "Consumers must navigate a complex and confusing billing system and wait for decisions from one or more insurance companies to find out how much they owe. For this reason, consumers often do not learn that they are delinquent on a medical bill until they hear from a collection agency, by which time their credit score has already suffered."