Merkley takes a stand against medical debt

U.S. Sen. Jeff Merkley today unveiled legislation that would ensure consumers’ credit scores aren’t permanently hurt by unpaid medical bills.

Merkley, an Oregon Democrat, said his Medical Debt Relief Act would “help get consumers back on their feet and restore our economy.”

He noted that millions of Americans have racked up medical debt through no fault of their own and due to unexpected illnesses, injuries or complex billing systems.

The legislation would prevent medical debt from damaging a person’s credit scores after it’s been paid off or settled.

“No American should be denied the opportunity to buy a home or a car simply because they had the misfortune to need medical care,” Merkley said in a written statement. “This bill presents a permanent, common-sense solution to a problem that has haunted millions of Americans for far too long. Removing paid-off and settled medical debts from consumer credit reports is a win-win for both consumers and our economy.”

About 43 million American consumers have overdue medical debt on their credit reports, according to the Consumer Financial Protection Bureau. Removing medical debt wouldn’t affect the predictive value of consumer credit reports, credit reporting companies have testified, according to today’s announcement.

Merkley is co-sponsoring the act with Democratic Sens. Dick Durbin of an Illinois, Richard Blumenthal of Connecticut and Bob Menendez of New Jersey. Rep. John Carney, a Delaware Democrat, introduced it in the House.