Medical Debt Relief Act would alleviate impact of paid debt on credit reports

Reps. Andy Barr (R-KY) and John Carney (D-DE) this week introduced the Medical Debt Relief Act, legislation that will require credit reporting agencies to remove all medical debt from a patient’s credit report within 45 days of the debt being settled or paid. 

Under current policy, it may take as long as seven years for paid medical debt to be removed from a credit report. Sen. Jeff Merkley (D-OR) is planning to introduce companion legislation in the Senate soon.

“Too many Americans face costly and unexpected medical bills,” Barr said. “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 Sen. Merkley on this important issue, which will help millions of Americans maintain accurate credit reports and fully participate in the economy.”

Additionally, the bill will provide more time for consumers negotiate or dispute charges before the debt can be reported by a credit agency. This provision ensures that incorrect or otherwise disputed debt does not show up immediately on a consumer’s credit report, which can be a cumbersome task to correct, even if it is erroneous.

“No one chooses to get sick or injured,” Carney said. “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.”