S.B. 1061 removes medical debt from credit reports

California Nurses Association (CNA) applauds Governor Gavin Newsom for signing S.B. 1061, which  would prevent medical debt collectors and health care providers from sharing medical debt information with credit reporting agencies. The bill, authored by Senator Monique Limón (D-Santa Barbara) and sponsored by CNA, Attorney General Rob Bonta, and a diverse coalition of organizations, would also prohibit consumer reporting agencies from including medical debt on credit reports.

“With ballooning out-of-pocket health care costs, we need a fair credit system that does not punish California’s patients for seeking health care when they need it,” said CNA President Michelle Gutierrez Vo, RN. “As a nurse, I’ve seen patients who delay care because they are afraid of going into debt. We appreciate Governor Newsom signing S.B. 1061 into law. This is a significant step towards removing all medical debt from credit reports and addressing the ruinous impacts of medical debt on our patients.”

“I am proud to author legislation to provide relief to Californians suffering from the burden of medical debt,” said Senator Monique Limón. “No Californian should be unable to secure housing, a loan, or even a job because they accessed necessary medical care. California is stepping up to protect consumers impacted by the effects of medical debt."

"When someone is scared and in pain, the last thing they should think about is whether seeking care will take away their ability to buy a house or land a job. Unfortunately, medical debt appearing on credit reports makes this a common experience for far too many people,” said Attorney General Rob Bonta. “California today chose to put a stop to this unnecessary and outdated practice. SB 1061 supports Californians’ fair access to essential economic opportunities and a brighter future.”

Nurses have long witnessed patients delay care or forgo essential medical care because of medical debt. At least 1 in 5 (more than 6 million) California adults have medical debt that would not be included in their credit reports because of this bill.

Medical debt has a deep impact on people’s lives:

• Californians with medical debt are twice as likely to skip care due to costs compared to those without medical debt.
• More than half of low-income Californians report that they postponed health care due to cost concerns.
  One in two low-income Californians have medical debt

Many patients who face damaging medical debt on their credit reports are uninsured or underinsured when they receive hospital or other care. Moreover, medical debt disproportionately impacts marginalized communities. Existing racial and socioeconomic health disparities are exacerbated when health care providers and medical debt collectors report unpaid medical bills to credit reporting agencies.

To enforce the prohibition of medical debt on credit reports, that debt would be voided if the information is provided to a credit reporting agency. 

California Nurses Association/National Nurses United is the largest and fastest-growing union and professional association of registered nurses in the nation with more than 100,000 members in more than 200 facilities throughout California and nearly 225,000 RNs nationwide.