"Nobody chooses to get sick, and then your credit gets ruined," said Chi Chi Wu, a senior attorney with the National Consumer Law Center. "That's why we encourage states to keep adopting laws. In case something goes wrong at the federal level, the states could protect their own consumers."
California lawmakers noted that medical debt - unlike other kinds of debt - isn't an accurate reflection of credit risk, and its inclusion can depress credit scores and make it hard for people to get a job, rent an apartment, or secure a car loan.
The bill, by Sen. Monique Limón, will block health care providers, as well as any contracted collection agency, from sharing a patient's medical debt with credit reporting agencies. At least eight states have banned medical bills from consumer credit reports in the past two years.
When California's new law goes into effect in January, it will extend these protections to credit reports used for employment and tenant screening, highlighting the importance of consumer protection in the face of unaffordable medical bills.
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