Senate approves medical debt bills
Legislation is among the consumer-protection efforts in the Senate’s HEALTH initiative
STATE HOUSE – The Senate approved three bills aimed at protecting Rhode Islanders from financial ruin resulting from medical debts.
Senator Jacob Bissaillon
The consumer-protection bills sponsored by Sen. Melissa A. Murray, Sen. John P. Burke and Sen. Jacob Bissaillon are all part of the Rhode Island HEALTH initiative (Holistic Enhancement and Access Legislation for Total Health) put forward by Senate leaders to improve health care access and affordability in Rhode Island.
The bills now go to the House of Representatives.
The first bill (2024-S 2709A), sponsored by Senator Murray (D-Dist. 24, Woonsocket, North Smithfield), would prohibit debt collectors from reporting all medical debt to credit bureaus.
It also sets rules for communication with consumers, false and misleading representation by debt collectors and a prohibition against collections during insurance appeals.
“In a recent survey by healthcare.com, all living generations reported that medical debts had harmed their credit scores, with millennials reporting the highest incidence, at 52 percent. Medical debts have significant long-term financial consequences, preventing individuals from getting home loans or other credit they need and causing some to make harmful sacrifices such as not paying rent or utilities or buying food or medicine.
The stress they cause can exacerbate a person’s health problems further,” said Senator Murray. “This bill is a measure to prevent medical debt from sending Rhode Islanders into a financial downward spiral for something over which they had no control.”
The second bill (2024-S 2710A), sponsored by Sen. John P. Burke (D-Dist. 9, West Warwick), would cap the interest rate on new medical debt at the interest rate equal to the weekly average 1-week constant maturity Treasury yield, but not less than 1.5% per year nor more than 4%, as published by the Board of Governors for the Federal Reserve System.
The interest rate would also be extended to judgments on medical debt. New debt is defined as debt incurred after the date of enactment.
“This bill curtails the unconscionable practice of profiting from and compounding the suffering of vulnerable Rhode Islanders who are struggling under the weight of medical debt,” said Senator Burke. “High interest rates for medical debt increase a burden that people already cannot bear, and further limit people’s abilities to ever escape from the debt cycle.”
The final bill (2024-S 2711A), sponsored by Sen. Jacob Bissaillon (D-Dist. 1, Providence) would prohibit the attachment of a lien to an individual’s home because of medical debt.
“The kind of catastrophic illness or injury that generally results in medical debt is not a person’s fault, and most people cannot be financially prepared for that situation,” said Senator Bissaillon. “As we all know, Rhode Island is enduring both a health care crisis and a housing crisis. We should not allow medical debt to subject anyone to housing insecurity on top of the health troubles they have already faced.”
Medical bills are among the top reasons underlying bankruptcy among Americans. A 2019 National Institute of Health study found that 66.5% of bankruptcy filers who responded indicated that medical expenses or problems contributed to their bankruptcy.