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(SACRAMENTO) – Legislation authored by Senator Monique Limón to ensure medical debt does not hurt consumer credit scores, has been signed by Governor Gavin Newsom. California joins seven other states to protect California consumers from the ruinous effects of medical debt on credit reports.
SB 1061, sponsored by Attorney General Rob Bonta, the California Nurses Associations and a coalition of consumer advocates, prohibits healthcare providers from providing information regarding a patient’s medical debt to a credit reporting agency. SB 1061 also requires hospitals and debt collectors to maintain records related to the collection of medical debt.
“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 “California today chose to put a stop to this unnecessary and outdated practice.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.”
Recently Vice President Kamala Harris announced that the Consumer Financial Protection Bureau would move to prohibit medical bills from being included on credit reports. As the CFPB undertakes the rulemaking process, SB 1061 provides California consumers with relief starting on January 1, 2025.
“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. As a nurse, I’ve seen patients who delay care because they are afraid of going into debt,” said Michelle Gutierrez Vo, RN and President of California Nurses Association. “We appreciate Gov. 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.”
“The Consumer Federation of California thanks Governor Newsom for signing SB 1061, and we’d like to show our profound appreciation to Senator Limón for her tireless leadership on this important consumer issue,” said Robert Herrell, Executive Director of the Consumer Federation of California. “SB 1061 is a significant step forward in the efforts to keep more medical debt off of credit reports. This is debt that consumers didn’t choose. Consumers shouldn’t be punished for getting sick or injured. While there is more work to be done on these pernicious medical debt credit cards today is a good day for California consumers.”
“This new law is welcome at a time when health care costs are rising, forcing more and more Californians to delay or skip care in fear of getting an expensive medical bill that can lead to debt,” said Katie Van Deynze, policy and legislative advocate for Health Access California, a co-sponsor of SB 1061 (Limón). “Black, Latino and low-income Californians disproportionately have medical debt, and counting it against credit exacerbates inequities in health, housing, employment and more. We thank Senator Limón and Governor Newsom for ensuring that Californians have more peace of mind to seek the care they need knowing it will not negatively affect their credit and their future.”