WASHINGTON — Sen. John Kennedy introduced legislation that would prohibit credit reporting agencies from including medical debt on consumer credit reports.
The proposed Protecting Americans from Treatment-related Credit Harm, or PATCH, Act would allow agencies to collect information on medical debt but would bar them from disclosing that debt in consumer credit reports.
“Fair-minded Americans know medical debt is different from a mortgage or a car loan. Patients don’t choose to get sick, and they don’t get to shop around for the best price from the back of an ambulance, either,” Kennedy said. “Medical debt is gutting the American people like a fish, and my bill will make sure this unfair debt doesn’t appear on any American’s credit report.”
According to information released with the bill, roughly one in three U.S. households carries some form of medical debt. Supporters of the legislation argue that medical debt reporting can lower credit scores and make it more difficult for consumers to secure affordable loans, housing, employment and insurance.
The bill’s backers also contend that medical debt differs from other consumer obligations because patients often cannot predict or negotiate costs before receiving treatment. They cited estimates that about 80% of medical bills contain errors and said medical debt disputes occur at a higher rate than disputes involving credit card debt.
The legislation comes amid ongoing national debate over the role of medical debt in consumer lending and credit scoring practices.