[Congressional Record Volume 156, Number 132 (Tuesday, September 28, 2010)]
[House]
[Pages H7079-H7081]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
MEDICAL DEBT RELIEF ACT OF 2010
Ms. KILROY. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 3421) to exclude from consumer credit reports medical debt
that has been in collection and has been fully paid or settled, and for
other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 3421
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Medical Debt Relief Act of
2010''.
SEC. 2. FINDINGS AND PURPOSE.
(a) Findings.--The Congress finds the following:
(1) Medical debt is unique, and Americans do not choose
when accidents happen or when illness strikes.
(2) Medical debt collection issues affect both insured and
uninsured consumers.
(3) According to credit evaluators, medical debt
collections are more likely to be in dispute, inconsistently
reported, and of questionable value in predicting future
payment performance because it is atypical and nonpredictive.
(4) Nevertheless, medical debt that has been completely
paid off or settled can significantly damage a consumer's
credit score for years.
(5) As a result, consumers can be denied credit or pay
higher interest rates when buying a home or obtaining a
credit card.
(6) Healthcare providers are increasingly turning to
outside collection agencies to help secure payment from
patients and this comes at the expense of the consumer
because medical debts are not typically reported unless they
become assigned to collections.
(7) In fact, medical bills account for more than half of
all non-credit related collection actions reported to
consumer credit reporting agencies.
(8) The issue of medical debt affects millions.
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(9) According to the Commonwealth Fund, medical bill
problems or accrued medical debt affects roughly 72,000,000
working-age adults in America.
(10) For 2007, 28,000,000 working-age American adults were
contacted by a collection agency for unpaid medical bills.
(b) Purpose.--It is the purpose of this Act to exclude from
consumer credit reports medical debt that had been
characterized as delinquent, charged off, or debt in
collection for credit reporting purposes and has been fully
paid or settled.
SEC. 3. AMENDMENTS TO FAIR CREDIT REPORTING ACT.
(a) Medical Debt Defined.--Section 603 of the Fair Credit
Reporting Act (15 U.S.C. 1681a) is amended by adding at the
end the following new paragraph:
``(z) Medical Debt.--The term `medical debt' means a debt
described in section 604(g)(1)(C).''
(b) Exclusion for Paid or Settled Medical Debt.--Section
605(a) of the Fair Credit Reporting Act (15 U.S.C. 1681c(a))
is amended by adding at the end the following new paragraph:
``(7) Any information related to a fully paid or settled
medical debt that had been characterized as delinquent,
charged off, or in collection which, from the date of payment
or settlement, antedates the report by more than 45 days.''.
SEC. 4. PAYGO BUDGETARY EFFECTS.
The budgetary effects of this Act, for the purpose of
complying with the Statutory Pay-As-You-Go Act of 2010, shall
be determined by reference to the latest statement titled
``Budgetary Effects of PAYGO Legislation' '' for this Act,
submitted for printing in the Congressional Record by the
Chairman of the House Budget Committee, provided that such
statement has been submitted prior to the vote on passage.
The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from
Ohio (Ms. Kilroy) and the gentleman from Alabama (Mr. Bachus) each will
control 20 minutes.
The Chair recognizes the gentlewoman from Ohio.
General Leave
Ms. KILROY. Mr. Speaker, I ask unanimous consent that all Members may
have 5 legislative days within which to revise and extend their remarks
on this legislation.
The SPEAKER pro tempore. Is there objection to the request of the
gentlewoman from Ohio?
There was no objection.
Ms. KILROY. Mr. Speaker, I yield myself such time as I may consume.
I thank the chair of the Financial Services Committee, Chairman
Barney Frank, and the subcommittee chair, Luis Gutierrez; as well as my
cosponsors, including my Republican cosponsors, Mr. Manzullo, Mr.
Burgess and Mr. Bilbray, for their support of H.R. 3421, the Medical
Debt Relief Act of 2010.
This bill would protect hardworking Americans who play by the rules,
pay or settle their medical debts, and yet find their economic well-
being and credit scores adversely affected for years to come due to
medical debt, large or small, that has gone to collection.
Specifically, this legislation would prohibit credit reporting agencies
from including in an individual's credit report fully paid off or
settled medical debt collection.
So many of us have had issues with trying to figure out what
insurance companies are paying and what they were responsible for or
maybe had to fight with a health insurance company to get them to honor
their obligation to pay a health care bill or maybe they had a high
deductible policy to save money and took a little bit extra time to pay
off their bill. But pay they did. And yet they find that their credit
is adversely affected for years to come.
This is a serious problem that can affect millions of people. In
fact, according to the Commonwealth Fund, medical bill problems or
accrued medical debt affects roughly 72 million working-age adults in
America. In 2007, 28 million working-age American adults were contacted
by a collection agency for an unpaid medical bill. Furthermore, a 2003
report in the Federal Reserve Bulletin found that medical debt
collections are more likely to be in dispute, inconsistently reported,
and of questionable value in predicting future credit payments or
credit performance because medical debt is atypical and non-predictive.
In the same 2003 report, it was found that 85 percent of medical
collections were for less than $500.
{time} 1800
This issue is further compounded by the fact that medical billing
errors are common among third-party insurers. According to the Quicken
Health Group, nearly 40 percent of Americans do not understand their
medical bills or are confused about the amounts owed and if those
amounts are correct. Finally, the enactment of H.R. 3421 would result
in more accurate credit scores, allowing businesses to better price
risk.
This legislation has broad-based support, including from the National
Association of Home Builders, the Mortgage Bankers Association,
Americans for Financial Reform, the National Credit Reporting Agency,
Consumers Union, the National Consumer Law Center on behalf of its low-
income clients, the National Association of Consumer Advocates,
Consumer Action, Families USA, UNITE HERE, the National MS Society, the
Corporation of Enterprise Development, the NAACP, the National Council
of La Raza, the Consumer Federation of America, U.S. PIRG, and
Community Catalyst.
Mr. Speaker, I reserve the balance of my time.
Mr. BACHUS. I yield myself such time as I may consume.
Mr. Speaker, I rise to address H.R. 3421. Credit scores and the
evolution of a robust credit reporting system have done much to improve
access to credit for millions of Americans, and they are an integral
component of our economy. Information found in credit reports and
captured by credit scores is used in today's economy for much more than
for just making credit decisions. A well-functioning national credit
reporting system helps those deciding whether to extend credit to
properly manage the associated risk, which in turn helps keep the cost
of credit lower for those who wish to borrow. Anything that undermines
the reliability or integrity of a consumer credit report is likely to
result in less credit being available to average Americans.
The question before us today is whether Congress should micromanage
the credit reporting system and restrict the ability of businesses and
creditors to review information about the credit history of a customer.
When evaluating H.R. 3421, it is important to remember that the right
to credit is not a right guaranteed by the government. It is made
available by lenders, and I think lenders have a right to all the
information about the borrower in making those decisions. Government
micromanagement of a consumer credit file could misallocate credit and
distort lending practices--two serious causes of the economic crisis we
are still struggling to escape.
Congresswoman Kilroy mentioned certain situations, and I certainly
sympathize with those situations. There may be other situations,
though, that we could imagine in which that information would indicate
something else. It may indicate an inability to pay on a loan that
someone was getting.
As we consider proposals such as the one the gentlewoman brings to us
in dealing with the use of credit reports, we must consider that, in
certain cases, unintended consequences may result from a less than
complete picture of a prospective borrower, and it may result in losses
by the lender. This is something we can't just totally block out.
Mr. Speaker, I reserve the balance of my time.
Ms. KILROY. I yield myself such time as I may consume.
Mr. Speaker, the gentleman from Alabama talks about robust reporting
and about making sure that credit is more accurately reported. This is
what this bill would do.
There is so much confusion and error surrounding the issue of medical
debt, and medical debt is not an accurate predictor of someone's
creditworthiness. Somebody might get a sudden illness or might get hit
by a car. It's not like a person is going out and buying a house full
of televisions or is going on a lot of vacations or out to dinner every
night. They are people who are playing by the rules and who are paying
off that debt.
To the contrary, I think that this bill, rather than undermining the
availability of credit, would actually encourage the availability of
credit by having more accurate credit scores and by allowing people to
obtain more reasonable rates on credit because of having more accurate
credit scores. Particularly now when people are also using credit
reporting with regard to employment decisions, it is all the more
important. I think it is fairer to
[[Page H7081]]
hardworking Americans. It will help the economy. It will help make a
more accurate credit reporting score.
I reserve the balance of my time.
Mr. BACHUS. Mr. Speaker, the gentlewoman talked about certain
situations. Let me say that I am sympathetic to the purpose of this
bill. You will see there are three Republican cosponsors on the bill.
What I'm saying and what, I think, the American people are beginning to
say pretty loudly is that they are uncomfortable with the government's
making these decisions as to what will be disclosed and what will be
withheld. I think the American people are sympathetic. I don't know of
a family in America who has not faced a medical emergency or who has
not faced a relative or a family member who has had a large medical
bill. So it sounds like something that would benefit people who have
gone through medical crises.
With each example of that, you could select another example of
someone, let's say, who had had elective surgery or a type of plastic
surgery who then had just not paid his bills for a few years. That
might be an example to which we would all say, well, that wasn't
intended, and that information would not be shared with lenders or with
a landlord or whomever.
As I say, I think that this is something Congress can decide, and you
obviously have some bipartisan support for this bill.
Mr. JOHNSON of Georgia. Mr. Speaker, today I rise in support of H.R.
3421, the Medical Debt Relief Act of 2009, which will ease the
financial burden shouldered by American families facing unaffordable
but necessary health care expenses.
Millions of Americans--especially unemployed Americans--struggle to
afford the health care they need. Illness can befall anyone, and the
financial burdens can be devastating. According to a joint study
conducted by Harvard Law School and Harvard Medical School, almost half
of Americans who file for bankruptcy do so because of medical expenses.
In my district, there were 2,200 health care related bankruptcies in
2008 alone.
The Medical Debt Relief Act will ensure that Americans who have paid
or settled their medical debt in full will have that medical debt
removed from their credit records. Americans who are no longer indebted
by medical expenses should not continue to be penalized and suffer from
compromised financial standing and poor credit simply because they
needed more time to fully pay off medical bills that can often be
insurmountable.
I supported the historic health care reform we passed this Congress
because I believe that quality health care should not be a privilege
reserved for those with means. The Medical Debt Relief Act, is another
step in the right direction. I support this legislation because it will
protect Americans from some of the unnecessary, lifelong financial
hardships that can arise from illness.
I hope my colleagues will join me and other bipartisan supporters of
this common sense legislation to improve quality of life and financial
security for hard working American families that have fully paid off or
settled their medical debt.
Mr. BACHUS. I yield back the balance of my time.
Ms. KILROY. This is a bill that will help millions of Americans, and
I ask my colleagues for their support.
Mr. Speaker, I have no further requests for time, and I yield back
the balance of my time.
The SPEAKER pro tempore (Mr. Critz). The question is on the motion
offered by the gentlewoman from Ohio (Ms. Kilroy) that the House
suspend the rules and pass the bill, H.R. 3421, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Mr. BACHUS. Mr. Speaker, I object to the vote on the ground that a
quorum is not present and make the point of order that a quorum is not
present.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the
Chair's prior announcement, further proceedings on this motion will be
postponed.
The point of no quorum is considered withdrawn.
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