Senator Limón’s bill would provide Californians with a fair credit system that does not punish them for seeking medical help when they need it.

California Nurses Association (CNA) applauds Sen. Monique Limón’s (D-Santa Barbara) recent introduction of S.B. 1061, which would prohibit consumer reporting agencies from including medical debt on credit reports. The bill, sponsored by CNA, Attorney General Rob Bonta, and a diverse coalition of organizations, would also prevent medical debt collectors from sharing medical debt information with credit reporting agencies.

“Today, a staggering 1 in 5 Californians has reported having medical debt, with a disproportionate impact on women and mothers. This debt negatively impacts Californians credit history, making it harder to secure a loan, buy a house, or be approved for a credit card,” said Sen. Limón. “Without a robust health care system that covers necessary and often lifesaving medical expenses in a timely, accurate, and comprehensive manner, medical debt should not be included on consumers’ credit reports.”

“California families should not need to suffer from the harmful and unnecessary impacts resulting from having their credit damaged by medical debt. We have a straightforward solution and need to implement it here in California, just as we have seen some of our sister states do successfully,” said Attorney General Bonta. “There is no need for medical debt to appear on credit reports, and we can stop the harmful spiral where people have unforeseen, catastrophic medical debt and become unhoused, underhoused, or unemployed. To reduce homelessness, to reduce food insecurity, and to address many of California’s other systemic issues, we must utilize upstream interventions that get to the crux of these problems. This is exactly what S.B. 1061 does.”

“Frontline nurses know that patients with medical debt, especially low-income Californians, delay or avoid medical care because they worry about the impact on their credit reports,” said CNA President Cathy Kennedy, RN. “S.B. 1061 will help to ensure patients will get the care they need by removing medical debt from credit reports. Then, we will have a fair credit system that will not penalize patients when they get the care they need and deserve.”

Nurses have long witnessed patients delay care or forgo essential medical care because of medical debt. These eye-opening facts reveal the deep impact of medical debt on people’s lives:

• Nearly 4 in 10 Californians (38 percent) report having medical debt.
• 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, and Black (53 percent) and Latine Californians (46 percent) are more likely to have medical debt than white (33 percent) or Asian Californians (28 percent).

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 ensure that patients get the care they need, nurses know that California must remove all medical debt from credit reports. S.B. 1061 would end this destructive practice by prohibiting consumer reporting agencies from including medical debt on credit reports. At least 1 in 5 (over 6 million) California adults have medical debt that would be kept off of their credit reports because of this bill.

The legislation would also protect patients’ personal information by requiring that any medical debt collection contracts bar medical debt information from being shared with credit reporting agencies.

To enforce the exclusion of medical debt on credit reports, medical debt would be voided if information regarding that debt 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 100,000 members in more than 200 facilities throughout California and nearly 225,000 RNs nationwide.