California Nurses Association applauds the California Senate’s passage (31-8) of S.B. 1061, which would prohibit consumer reporting agencies from including medical debt on credit reports.

The bill, authored by Sen. Monique Limón’s (D-Santa Barbara) and 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.

“Our patients should not have to suffer by being reported to creditors due to medical debt,” said CNA President Cathy Kennedy, RN. “We deeply appreciate the California Senate for voting in favor of S.B. 1061. This is a major first step towards removing all medical debt from credit reports because we need 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. At least 1 in 5 (over 6 million) California adults have medical debt that would not be included in their credit reports because of this bill.

Medical debt has a deep impact on people’s lives:

-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

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.

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 prohibition of medical debt on credit reports, that debt would be voided if the information is provided to a credit reporting agency.

The bill now moves to the California Assembly.