New CT law prohibits health care providers from reporting medical debt for use in credit reports

A law that prohibits health care providers and hospitals in Connecticut from reporting a patient’s medical debt to credit rating agencies for use in credit reports was signed by Gov. Ned Lamont.

“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 said in statement. “By prohibiting medical debt from being reported to creditors, we are protecting patients who may have otherwise been apprehensive about seeking essential medical care.”

Lamont said the law also voids any medical debt that is reported to credit rating agencies. It takes effect July 1, 2024.

State Sen. Matt Lesser, D-Middletown, co-chair of the Human Services Committee, pushed for the law.

“Medical debt is not the result of poor financial decisions – it is the result of a health care system where many families are just one accident or one bad diagnosis away from ruined credit and all that comes with it,” Lesser said, in the statement.

“With Governor Lamont’s signature, Connecticut now has some of the strongest consumer protections in the country. This was a priority for me this session and I am grateful to Governor Lamont and to Senate President Martin Looney for their strong support.”

The Connecticut Hospital Association, the federal Consumer Financial Protection Bureau, and others submitted testimony to the legislature in support of the bill, records show.

Lamont also announced on Good Morning America in February that Connecticut would erase $1 billion in medical debt for eligible residents.

That relief, which would help an estimated 250,000 residents, will come from a $6.5 million fund from the COVID-era American Rescue Plan Act of 2021 that sought to cancel medical debt, he said at the time. The state will work with a nonprofit that buys medical debt at a reduced rate to eliminate the debt by June, according to the interview.

The credit rating legislation is Public Act 24-6, An Act Concerning the Reporting of Medical Debt.