The Biden administration has proposed a federal effort that would exclude medical debt from personal credit reports. Supporters of the move say it could help people with medical debt have an easier time securing housing and other loans.
“It is very similar in scope to Governor Lamont's banning of medical debt being reported to credit rating agencies Experian, Equifax, TransUnion,” said Nick McLaughlin, an advisor at Emry Health. Their mission is to help facilitate affordable access to healthcare.
McLaughlin said the new federal legislation won’t help Connecticut residents, because Governor Ned Lamont has already taken steps to do so.
Lamont signed the bill banning medical debt on credit reports in May. Earlier in the year, he signed legislation to use federal ARPA funds to cancel $650 million of eligible medical debt.
“The goal is to make it so that having medical debt no longer has negative consequences on one's credit,” McLaughlin said. “So there's still access to loans and financing to help folks with their day-to-day expenses.”
McLaughlin said medical providers have used credit reporting as leverage to collect unpaid medical bills. If new legislation prevents them from doing that, McLaughlin said that may lead to providers to ask for payment before providing care.
“Pre-service collection requirements in non-emergency situations of course could be an outcome of the legislation,” McLaughlin said. “But also potentially more use of small claims court or legal actions to attempt to collect medical debt.”
McLaughlin has three suggestions for those faced with a large bill from medical procedure that could lead to high medical debt:
1. Ask the hospital about their financial assistance program.
“Many hospitals in Connecticut offer financial assistance to patients with household incomes up to 500% of the federal poverty level,” McLaughlin said. “A family of four can earn around $150 to $160,000 per year and still qualify for a significant discount on the out-of-pocket medical costs.”
2. Review the bill for errors.
“Request that itemized statement with full breakdown.” McLaughlin said.
3. Hire a billing advocate.
There’s a federal program that can help you find a patient advocate. The State of Connecticut can provide assistance, as well.
