Congressmen Andy Barr (R-KY) and John Carney (D-DE) announced the introduction of H.R. 2362, the Medical Debt Relief Act. This bill would require credit reporting agencies to remove medical debt from a credit report within 45 days of the debt being either settled or paid in full.  Currently, consumers may have to wait for up to seven years for paid medical debt to be removed from their credit report. Moreover, the bill provides additional time to consumers faced with a medical bill to work out the charges prior to the debt being placed on his or her credit report.  This will help ensure that erroneous or disputed medical charges do not end up on a consumer’s credit report. Senator Jeff Merkley (D-OR) plans to introduce companion legislation in the Senate.  

High medical bills are one of the leading causes of indebtedness in America -- half of all overdue debt on credit reports is from medical expenses.  Over 43 million Americans now have unpaid medical debt adversely affecting their credit reports -- negatively impacting their ability to borrow at affordable rates to purchase a home, buy a car, or start a business.  Indeed, fifteen million Americans have medical debt collection items as the only collections on their credit reports, and the medical debt that shows up on these reports is only a small amount, on average $579. 

“Too many Americans face costly and unexpected medical bills,” said Congressman Barr.  “They should not have to endure the additional burden of years of bad credit due to an illness, injury, or even an inaccurate medical billing.  I’m honored to work with Congressman Carney and Senator Merkley on this important issue, which will help millions of Americans maintain accurate credit reports and fully participate in the economy.”

“No one chooses to get sick or injured,” said Congressman Carney. “And when unexpected illness or injury occurs, the last thing patients need is a set of confusing, complex, and delayed medical charges that damage their credit score. This bill recognizes that medical debt has little to do with a person’s ability or willingness to pay their debts and more to do with the unplanned, involuntary nature of medical costs.”

The credit reporting industry has begun to recognize that medical debt does not reflect a consumer’s credit-worthiness -- but there is more work to be done. The Medical Debt Relief Act would expand and codify these positive developments to ensure all consumers are treated fairly when it comes to medical debt payments. The bill builds on proposals introduced in past Congresses that have repeatedly garnered bipartisan support.