New Sen. Bailey law protects consumers from the negative impacts of medical debt
AUGUSTA — On Wednesday, September 24, a new consumer protection law from Sen. Donna Bailey, D-Saco, took effect. LD 558, “An Act to Strengthen Consumer Protections by Prohibiting the Report of Medical Debt on Consumer Reports,” prohibits a consumer reporting agency from listing medical debt on an individual’s consumer report. It also prohibits medical providers and debt collection agencies from reporting medical debt to any consumer reporting agency.
“Given the recent action taken by a federal judge in Texas to remove the federal prohibition on the reporting of medical debt, this new state law has a big impact,” said Sen. Bailey. “Although Americans no longer have the federal protection, Mainers will continue to have protection here in our state. When we go to the hospital for medical care, especially for emergencies, any debt that we take on should not hold us back from buying a car, renting a home or taking out a loan. In the next session, I plan to continue this work. I will propose a bill to ban liens on homes or the taking of people’s wages while they work to pay off their medical debt.”
Consumers for Affordable Health Care released data that shows that nearly half of Maine families have taken on medical debt in the last two years. In addition, one out of four Maine families with medical debt owe $5,000 or more.
More than half of Mainers with medical debt report that their credit score has been negatively affected by the debt, and a lower credit score can negatively impact someone’s ability to rent or otherwise obtain housing. The majority of those surveyed have indicated that their ability to obtain employment or loans has also been negatively impacted by their debt.
For the Second Regular Session of the 132nd Maine State Legislature, Sen. Bailey has submitted “An Act to Strengthen Consumer Protections by Prohibiting Liens on Principal Residence and Wage Garnishments for Medical Debt.” In the Second Regular Session, the Legislative Council must approve any new bill requests from lawmakers before they are introduced to the full Legislature. The Council is set to meet on Thursday, Oct. 23. For any denied requests, lawmakers will have an opportunity to appeal denials.
For assistance with removing medical debt from consumer credit reports, contact the Maine Consumer Credit Protection Bureau at 1-800-332-8529.
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