By Juan Jocom

Washington State Journal

After battling two cancers, Kristopher Shook found himself overwhelmed by medical bills that led to lawsuits, and hundreds of thousands in medical debt.

“My only focus was on beating cancer no matter the cost,” Shook said. “There was no price tag on my life, and I was willing to do whatever it took to survive. I wasn’t concerned about the medical bills as I was fighting for my life.”

As past-due bills pile up, credit agencies take note, and credit ratings plunge. To help with that aspect of medical debt, a bill now winning support in the state Legislature prevents medical debt from being reported to consumer credit agencies.

To force compliance with the law, SB 5480, sponsored by Sen. Marcus Riccelli, D-Spokane, would also nullify medical debts if they did appear on a consumer credit report. Failure to comply would also constitute a violation of the Consumer Protection Act, allowing individuals to sue for up to $25,000 in damages plus attorney’s fees.

According to a recent survey, one in three households in Washington struggles to manage medical debt, Riccelli added. It is one of the leading causes of bankruptcy in the United States, with 100 million Americans owing more than $200 billion, according to the Consumer Financial Protection Bureau.

Julia Kellison, who runs a weekly debt collection clinic with the advocacy group Northwest Justice Project, said while most patients have insurance, they often are underinsured.

“They come to our clinic having been sued by a debt collector over hospital debt,” Kellison said. “They don’t even know they qualify for hospital charity care because the hospital has failed to screen them. So, the hospital debt goes to collections, where the problem intensifies with a lawsuit.”

Not everyone thinks it’s a good idea to remove medical debt from credit reports or penalize credit agencies that report medical debt.

Sen. Phil Fortunato, R-Auburn, argued the bill would make it harder for creditors to fully assess a person’s creditworthiness. Sen. Jeff Holy, R-Cheney, questioned whether the bill could lead to increasing costs for others.

Kelsi Hamilton, legislative chair of the Washington Collectors Association, contended that despite the unpredictability of medical debt, individuals are still responsible for paying what they owe. Hamilton also warned if providers are unable to collect the debts, they may try to recoup the cost through higher fees.

The bill was approved by the Senate with 35 yeas, 12 nays and two excused. It is now under consideration in the House.

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