On July 1, a new Connecticut law will take effect preventing health care providers from reporting medical debt to credit agencies, shielding residents’ credit scores from the potential adverse financial impacts of seeking care. State lawmakers passed the measure during the most recent legislative session. Sean King, the acting head of the Office of the Healthcare Advocate, said the change will ensure that getting medically necessary care won’t hamper someone’s ability to, for example, get financing for a house or car purchase in the future.
“People will be able to continue to move on with their lives in that way without these medical debts holding them back,” said King. One important caveat is that the provision only applies to debt owed directly to a medical provider. If someone pays for medical services with a credit card and carries the debt on the card, it can still be reported to credit agencies.
Medical debt impacts roughly 280,000 people in Connecticut, or nearly 8% of residents. National polling shows that Black Americans, people in worse health and those with a disability are disproportionately burdened by medical debt. At least two other states, New York and Colorado, have similar laws in place, and the Consumer Financial Protection Bureau proposed a federal version earlier this month .
In recent years, the major credit bureaus made several changes to their reporting of medical debt, including removing paid medical collections from credit reports and remov.