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Rhode Island General Assembly OKs measure to keep medical debt off credit reports

The Rhode Island General Assembly today passed significant legislation sponsored by Representative Mary Ann Shallcross Smith and Senator Melissa A. Murray designed to shield Rhode Islanders from the negative credit impacts of medical debt.

The bill (2024-S 2709A, 2024-H 7103A), which now awaits the governor’s signature, prohibits debt collectors from reporting medical debt to credit bureaus. Additionally, it establishes guidelines for communication with consumers, bans false and misleading representations by debt collectors, and prohibits collections during insurance appeals.

“Medical debt is a growing and persistent problem that so many of our friends and family consistently face,” said Representative Shallcross Smith (D-Dist. 46, Lincoln, Pawtucket). “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 common-sense reform.”

This consumer-protection bill is part of the Rhode Island HEALTH initiative (Holistic Enhancement and Access Legislation for Total Health), an effort by Senate leaders to improve health care access and affordability in the state.

“In a recent survey by healthcare.com, all living generations reported that medical debts had harmed their credit scores, with millennials reporting the highest incidence, at 52 percent. 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. The stress they cause can exacerbate a person’s health problems further,” said Senator Murray (D-Dist. 24, Woonsocket, North Smithfield). “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.”

Medical bills are among the top reasons for bankruptcy in the United States. A 2019 National Institute of Health study found that 66.5% of respondents who filed for bankruptcy cited medical expenses or issues as contributing factors.

The newly approved legislation marks a significant step in protecting Rhode Islanders from the severe financial repercussions of medical debt, ensuring that unexpected health issues do not lead to lasting financial hardship.




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