New CT law will prevent medical debt reporting to creditors

One of the first bills from this Connecticut legislative session to get signed into law prohibits the reporting of medical debt to credit agencies.

The new state law bars health care providers and hospitals from reporting medical debt, a move which can hurt a person’s credit score.

Gov. Ned Lamont signed the bill on May 9, a day after the end of the 2024 legislative session .

“When medical debt is included in a person’s credit report, creditors are making decisions based on a person’s medical history that is not necessarily representative of their financial responsibility and household finances,” Lamont, a Democrat, said in a statement.

Hundreds of thousands of state residents have incurred medical debt . State Sen. Matt Lesser, D-Middletown, spearheaded the bill, and called it some of the “strongest consumer protections in the country.”

The measure also prevents other kinds of medical debt collection, such as wage withholdings and voids any medical debt that is reported to credit rating agencies.

Across the U.S., medical debt collections disproportionately affect communities of color , according to the National Consumer Law Center.

Reporting medical debt also feeds into a cycle of economic and health inequities, according to Gretchen Shugarts with the legislature’s Commission on Racial Equity in Public Health. Concern for medical bills is one of the reasons people avoid or delay health care, she said.

“By the time they actually get in to see someone, that whatever condition could go from being a very minor thing that could have been treated early on, becomes this huge expense,” Shugarts said.

More needs to be done in the state to lower the cost of health care in general, she said.

Kally Moquete, with Health Equity Solutions, said health care is a human right everyone should be entitled to.

“Medical burden affects everyone. But when you look at those with poor health outcomes in the state of Connecticut, that’s our Black and Brown communities,” Moquete said. “This legislation was one step getting us forward in the right direction to ensure that we’re protecting our individuals.”

The law officially goes into effect on July 1.

This story was first published May 14, 2024 by Connecticut Public.