R.I. legislators pass bill to keep medical debt off credit reports

THE GENERAL ASSEMBLY recently passed legislation that would protect Rhode Islanders from credit problems resulting from medical debts. Pictured is the R.I. Statehouse. / PBN FILE PHOTO/NICOLE DOTZENROD

PROVIDENCE – The General Assembly recently passed legislation that would protect Rhode Islanders from credit problems resulting from medical debts.

The bills sponsored by Rep. Mary Ann Shallcross Smith, D-Lincoln, and Sen. Melissa A. Murray, D-Woonsocket, would prohibit debt collectors from reporting all medical debt to credit bureaus. It also sets rules for communication with consumers, false and misleading representation by debt collectors, and a ban against collection during insurance appeals.

“Medical debt is a growing and persistent problem that so many of our friends and family consistently face,” Shallcross said. “Unlike other types of debt, where people spend beyond their means, medical debt occurs because people have the misfortune of getting sick. This bill looks to provide compassion and relief to Rhode Islanders by instituting commonsense reform.”

The legislation was one of the 25 bills in the Rhode Island HEALTH initiative introduced by Senate leaders to boost health care access and affordability.

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Murray pointed out that a survey by healthcare.com reported that medical debts harmed credit scores for all living generations, with millennials being the highest at 52%.

“Medical debts have significant long-term financial consequences, preventing individuals from getting home loans or other credit they need and causing some to make harmful sacrifices such as not paying rent or utilities or buying food or medicine,” Murray said. “The stress they cause can exacerbate a person’s health problems further. This bill is a measure to prevent medical debt from sending Rhode Islanders into a financial downward spiral for something over which they had no control.”

A 2019 National Institutes of Health study found that medical bills are among the top contributors to bankruptcy for Americans. The study showed 66.5% of bankruptcy filers who responded to the survey indicated medical expenses or problems contributed to their bankruptcy.

Katie Castellani is a PBN staff writer. You may contact her at Castellani@PBN.com.

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