If signed into law, any medical debt reported to credit agencies in California would be void and unenforceable. This is part of Senate Bill 1061, introduced by Sen. Monique Limón, which aims to protect Californians from the burden of medical bills affecting their credit scores. The bill would prevent medical debt from appearing on credit reports and being used to assess creditworthiness.
According to Limón, the bill is necessary to help millions of Californians who struggle with past-due medical expenses. She emphasized that medical debt can disproportionately impact low-income individuals, black and Latino communities, and young people, limiting their access to financial opportunities.
The bill also addresses the inaccuracies often found in medical debt reported to credit agencies due to billing errors and insurance disputes. It forgives debts and restricts collections agencies from pursuing individuals for medical debts.
Supporters of the bill, including Attorney General Rob Bonta and advocacy groups, argue that removing medical debt from credit reports can improve financial stability for families. They believe that medical debt should not hinder access to credit, housing, or employment.
However, opponents, such as physician groups and the credit industry, express concerns about the potential disruptions and ambiguities in the bill’s language. They argue that voiding medical debt reported after a certain date could have unintended consequences and negatively impact the healthcare industry.
Despite the debate, Gov. Gavin Newsom has until Sept. 30 to make a decision on the legislation. Health Access California, a consumer advocacy coalition, urges Newsom to approve the bill to protect health consumers from having their credit affected by necessary medical care.
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