[Congressional Record (Bound Edition), Volume 156 (2010), Part 12]
[House]
[Pages 16839-16841]
[From the U.S. 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.
       (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

[[Page 16840]]

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 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.
  Ms. RICHARDSON. Mr. Speaker, I rise today in support of H.R. 3421, 
the ``Medical Debt Relief Act of 2010,'' which would address the issue 
of medical debt and the crippling effect that such debt can have on an 
individual's credit report, even long after it has been paid off. This 
bill will right an injustice in the credit scoring industry that 
unfairly penalizes thousands of families across the country.
  I thank Chairman Frank for his leadership in bringing this bill to 
the floor. I also thank the sponsor of this legislation, Congresswoman 
Kilroy, for her attention to this important issue.
  Mr. Speaker, in 2007, over 28 million Americans were contacted by 
debt collections agencies regarding medical debt. Unlike other forms of 
debt, however, individuals do not choose when to take on medical debt. 
The nature of serious illness is such that it often comes when we least 
expect it. Many people develop from low credit scores simply because 
they were forced to assume large amounts of medical debt when they did 
not expect it and were, thus, financially unprepared to do so. 
Unfortunately, these individuals' credit scores often remain low long 
after their debt has been paid off, and in some cases for the rest of 
their lives. This is an unfair penalty for individuals who have done 
nothing wrong.
  H.R. 3421 will correct this problem by inserting a clause into the 
Fair Credit Reporting Act that to eliminate medical debt from credit 
reporting within 3o days of the debt being fully paid off. Credit 
reports are an important tool for leasers, lenders, and many other 
industries. This bill will ensure that credit reports reflect 
individuals' actual credit-worthiness, rather than providing an 
artificially low-score that is dragged down by medical debt from the 
past.
  I urge my colleagues to join me in supporting this H.R. 3421.
  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.

[[Page 16841]]

  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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