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PRESS RELEASE: Medical debt credit reporting legislation signed into law in Colorado
Colorado becomes the first state to prohibit medical debt information from being included on consumer credit reports and factored into credit scores
DENVER, CO — June 6, 2023 — Historic consumer protection legislation, House Bill 23-1126, was signed into law on Monday. The bill stops medical debt from being included on credit reports and factored into credit scores in Colorado, except under very narrow circumstances.
The legislation makes Colorado the first state in the country to enact legislation barring all medical debt from being included on credit reports.
One in eight Coloradans have medical debt in collections, and the burden is especially acute among marginalized communities. Due to systemic inequities, one in five people in communities of color in Colorado have medical debt in collections — nearly twice the rate of medical debt in majority-white communities. Lower-income people, people with disabilities, people in rural areas, uninsured people, women, LGBTQ+ people, and young people are also disproportionately burdened.
“This legislation will give people with medical debt a fair chance at getting back on their feet after a major medical event,” says Julia Char Gilbert, Connelly Policy Advocate at the Colorado Center on Law and Policy, which led the coalition behind the bill. “While we work to eliminate the root causes of medical debt, this legislation will provide needed relief to the 700,000 Coloradans who have medical debt in collections. This is an extraordinary victory for patients, and we are proud that Colorado is leading the nation on this.”
“No one should face barriers to housing or economic stability because they got sick and were stuck with a medical bill they couldn’t afford to pay,” says Representative Naquetta Ricks (D-Aurora), who sponsored the legislation in the House alongside Representative Ron Weinberg (R-Loveland). “Medical debt is a bad predictor of creditworthiness, and landlords, lenders, and employers simply don’t need that information to make sound decisions about consumers’ lives.”
“People recovering from illness or injury should be focused on healing, not worrying about their credit score,” says Senator Tony Exum (D-Colorado Springs), the bill’s Senate sponsor. “This legislation will make that a reality in Colorado.”
The legislation is set to take effect in August of this year and will remain in effect until July 1, 2028, unless the legislature takes action to renew the legislation. Consumer advocates are hopeful the protections will be extended.
“We are confident that the positive impacts of these protections will be abundantly clear,” says Char Gilbert. “We are optimistic that lawmakers will understand the tremendous value of the legislation and will act to extend it in perpetuity.”
House Bill 23-1126 was championed by the Colorado Center on Law and Policy and a diverse coalition of partners, including AARP Colorado, ALS Association, Bell Policy Center, Centennial State Prosperity, Chronic Care Collaborative, Community Economic Defense Project, Colorado Children’s Campaign, Colorado Coalition for the Homeless, Colorado Community Health Network, Colorado Consumer Health Initiative, Colorado Cross-Disability Coalition, Colorado Hospital Association, Colorado Organization for Latina Opportunity and Reproductive Rights, Colorado Poverty Law Project, Disability Law Colorado, Elephant Circle, Healthier Colorado, Leukemia & Lymphoma Society, Lutheran Advocacy Ministry Colorado, Mental Health Colorado, New Era Colorado, Progress Now Colorado, Rocky Mountain MicroFinance Institute, Small Business Majority, Soul 2 Soul Sisters, Spring Institute, Towards Justice, and Young Invincibles.