The Medical Debt Responsibility Act – Press Release

Reps. Manzullo, Hall and Shuler
Champion ‘Medical Debt Responsibility Act’ in U.S. House of Representatives
Proposed legislation could help millions of credit-worthy Americans receive the credit score they deserve

WASHINGTON, DC, June 6, 2011 – Representatives Don Manzullo (R-IL16), Ralph Hall (R-TX4) and Heath Shuler (D-NC11) are championing the bipartisan Medical Debt Responsibility Act of 2011 in the U.S. House of Representatives. On June 2, these three Members of Congress introduced H.R. 2086, legislation that will allow consumers to pay or settle medical debt in collection and have their credit reports reflect that action within 45 days. As a result, many credit-worthy Americans will have access to credit that they can use to purchase homes and major consumer goods—items that were previously unavailable to them because current law allows paid-off medical debts to remain on consumers’ reports for up to seven years.

A recent Commonwealth Fund study showed that 14 million Americans have medical debt items on their credit reports as a result of mistakes in billing. In 2010, 30 million Americans were contacted by collection agencies for unpaid medical bills and billing that is error-prone and confusing to consumers.

“Small amounts of medical debt cause huge credit problems for millions of responsible, hard-working Americans who have suffered an illness or accident,” said Rep. Shuler. “This legislation is a win for consumers and the economy. By keeping cleared medical debt off of credit reports, this bill will allow more Americans to have the credit score they deserve and need to buy homes and stimulate economic growth in their communities.”

H.R. 2086 was applauded by Rodney Anderson, who is executive director of Supreme Lending, a financial expert and author of the book Credit 911. Rodney Anderson recognized that this failure in current law was not only unfair to consumers but also stifled the economy. Based on his own research, Mr. Anderson single-handedly created a grassroots movement, got the attention of champions in Congress, and urged the introduction of this legislation. The Medical Debt Responsibility Act requires that medical bills of $2,500 or less, which now have a zero balance from having been paid or settled, be removed from credit reports. Presently, medical debt that has been completely paid off or settled can still remain reflected on consumers’ credit scores for up to seven years. As a result, millions of hard working and credit worthy Americans are being denied credit and are paying higher interest rates on mortgages.

“Medical debt is not a reliable indicator of credit risk, yet nearly a quarter of Americans have seen their credit scores plummet because of small, routine medical bills,” said Rep. Nydia Velazquez (D-NY12), Ranking Member of the House Small Business Committee an and original cosponsor of H.R. 2086. “This bill provides a common-sense, simple solution to address this problem now and protect consumers in the future.”

Said Mr. Anderson: “The bill being introduced into the 112th Congress will create jobs, allow qualified Americans access to credit and mortgages, put the housing market back on the road to recovery and provide a substantial boost to the economy — all at no expense to taxpayers or to the government.”

“I am pleased to be a sponsor of the Medical Debt Responsibility Act,” said Rep. Hall. “This bill, which costs the taxpayer nothing to implement, is a bipartisan effort that recognizes the difficulties and inconsistencies relating to medical debt. At a time when our economy is unstable, this is a small but important step to bolstering financial certainty for Americans.”

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