Kennedy introduces bill to protect consumers from unfair medical debt reporting

WASHINGTON - Sen. John Kennedy (R-La.) today introduced the Protecting Americans from Treatment-related Credit Harm (PATCH) Act, a bill that would prevent credit reporting agencies from including medical debt on consumer credit reports.

"Fair-minded Americans know medical debt is different from a mortgage or a car loan. Patients don't choose to get sick, and they don't get to shop around for the best price from the back of an ambulance, either. Medical debt is gutting the American people like a fish, and my bill will make sure this unfair debt doesn't appear on any American's credit report," said Kennedy.

Background:

• One in three American households is currently facing some type of medical debt. The reporting of medical debt can result in lower credit scores for many patients. In turn, those patients face higher interest rates and more difficulty finding housing, employment, and affordable insurance.

• Americans with medical debt are just as likely to repay their loans in full as borrowers without medical debt. Medical debt, on the other hand, is far less accurate than other forms of debt. Roughly 80% of medical bills contain errors, and medical debt is disputed at three times the rate of credit card debt.

• The PATCH Act would allow credit reporting agencies to collect general information about medical debt, but it would forbid agencies from disclosing that debt on a consumer's credit report.

Full text of the PATCH Act is available here.