Katherine Wallat, Legal Director at CCLP, provided testimony against House Bill 26-1327, which aimed to address the problem of large corporations relying on the state to provide health insurance by paying their workers low enough wages to enroll in Medicaid. CCLP agrees corporations should pay their fair share, but ultimately opposed the bill because of the harm it could cause workers perceived to use Medicaid due to their age, disability, or income level.
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Medical debt on credit reports: harmful and unnecessary

On Wednesday, February 22, 2023, Julia Char Gilbert, CCLP’s Connelly Policy Advocate, provided testimony to the House Business Affairs & Labor Committee for House Bill 23-1126, Medical Debt Credit Reporting Protections. CCLP is in support of HB23-1126.
Madame Chair and members of the committee, thank you for the opportunity to speak to you today.
My name is Julia Char Gilbert. I’m the Connelly Policy Advocate at the Colorado Center on Law and Policy. And I am here today on behalf of CCLP in strong support of House Bill 23-1126.
CCLP is a nonprofit dedicated to the fight against poverty in Colorado. Medical debt is an important issue to CCLP because medical debt exacerbates inequities and creates barriers to economic stability for Colorado families.
Others who have spoken today have underscored how credit reporting of medical debt harms Coloradans and compounds the physical, mental, and financial stress of illness and injury.
I will focus my remarks on why medical debt is a poor predictor of creditworthiness and why it is therefore not necessary for medical debt information to be included on credit reports.
Medical debt is not a good predictor of creditworthiness because medical debt is not like other types of debt:
- Medical debt is typically incurred involuntarily and unexpectedly.
- The healthcare system and the billing process in particular are also uniquely confusing and opaque. Patients routinely have bills sent to collections that should have been covered by insurance. And many don’t even know they have medical debt in collections until they are denied housing or a loan on that basis.
- Additionally, medical providers do not alert the credit bureaus when you make on-time payments on medical bills, the way that debt collectors share information when you’re late on a payment. This asymmetry in reporting means consumers lose when medical information is included on credit reports.
- Finally, the credit reporting system is riddled with errors. One-third of consumers have errors on their credit reports. Medical debt information is particularly susceptible to errors. Medical collections are disputed seven times more frequently than student loans and three times more frequently than credit card debt. These errors not only harm consumers; they also contaminate the quality of the data that lenders, landlords, and others use when making important decisions.
With all this in mind, leaders in the credit industry have begun moving away from the use of medical debt information. VantageScore has announced its newest credit scoring models will no longer consider medical debt. And the federal government has begun to eliminate consideration of medical debt in all federal lending programs.
These changes will help people across the country, and they demonstrate that it is simply not necessary for credit scores to consider medical debt in order to be predictive.
In closing, this bill is an opportunity to provide needed relief to 700,000 Coloradans and their families. At no cost to the state, it would improve health outcomes, grow small businesses, and keep our neighbors housed. Giving Coloradans with medical debt a fair chance helps our economy, and it helps our communities thrive.
Again, thank you for your time, and I welcome any questions you may have.
Sincerely,
Julia Char Gilbert
Connelly Policy Advocate
Colorado Center on Law and Policy
HB23-1126 passed the Colorado Legislature and is awaiting the Governor’s signature!
