Legislation would shield patients’ credit scores from medical debt
October 21, 2023 - Congresswoman Katie Porter (D-CA) and Senator Jeff Merkley (D-OR) have reintroduced bicameral legislation to protect patients from the long-term 
financial harms of high health care costs. Despite medical debt being an unreliable indicator of creditworthiness, it appears on the credit reports of tens of millions of American households. The Medical Debt Relief Act would ban all medical debt from appearing on credit reports and prohibit creditors from considering Americans’ medical debt in their decisions on whether to extend them credit.
“Getting medical treatment shouldn’t force families into lifetimes of financial hardship,” said Rep. Porter, a former consumer law professor. “Under the status quo, unexpected and lifesaving health care costs can saddle Americans with debt and tank their credit scores. My bill with Senator Merkley would prohibit credit bureaus from reporting medical debt, making it easier for people bogged down with medical bills to rent an apartment, buy a home, or get a loan.”
“It is outrageous that a family with medical debt on their credit report has their credit and financial future destroyed, even if the debt is incorrectly reported,” Senator Merkley said. “Our current medical debt reporting process is kicking families while they’re down and struggling to get back up. It’s long past time we fix that.”
In September, following years of Rep. Porter’s advocacy for protections against medical debt, the Consumer Financial Protection Bureau (CFPB) began the process of preventing medical debt from appearing on credit reports or being used in credit decisions. Rep. Porter’s bill demonstrates Congress’ support for the CFPB using its existing authority to put these principles into federal regulations, and would cement these principles into law.
Congresswoman Porter’s legislation is supported by organizations such as the National Consumer Law Center (on behalf of its low-income clients), Americans for Financial Reform Education Fund, Appleseed Foundation, California Low-Income Consumer Coalition, Center for Responsible Lending, Community Catalyst, Consumer Action, Consumer Federation of America, Justice in Aging, National Association of Consumer Advocates, National Consumers League, National Health Law Program, National Patient Advocate Foundation, Public Justice, Public Law Center (CA), RIP Medical Debt, and the Western Center on Law and Poverty (CA).
Reps. Nanette Barragán (D-CA), Kathy Castor (D-FL), Judy Chu (D-CA), Yvette Clarke (D-NY), Lloyd Doggett (D-TX), Valerie Foushee (D-NC), Raúl Grijalva (D-AZ), Jonathan Jackson (D-IL), Pramila Jayapal (D-WA), Hank Johnson (D-GA), Raja Krishnamoorthi (D-IL), Barbara Lee (D-CA), Jim McGovern (D-MA), Grace Meng (D-NY), Kevin Mullin (D-CA), Joe Neguse (D-CO), Eleanor Holmes Norton (D-DC), Ilhan Omar (D-MN), Mark Pocan (D-WI), Mary Gay Scanlon (D-PA), Abigail Spanberger (D-VA), Rashida Tlaib (D-MI), and Paul Tonko (D-NY) cosponsor the Medical Debt Relief Act.
As a longtime law professor and consumer advocate, Rep. Porter has championed consumer protection in Congress. She fought to protect patients from Big Pharma’s corporate abuse by introducing the Freedom From Price Gouging Act to prevent pharmaceutical companies from profiting off of unreasonable price hikes. This legislation was signed into law as part of the Inflation Reduction Act. In July, she hosted a roundtable with consumer protection organizations to discuss the elimination of junk fees and deceptive advertising.
Source: Congresswoman Katie Porter
