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Ohio Representative Kilroy's Medical Debt Bill Passes in House

The United States House recently approved a measure that would prohibit the credit bureaus from using medical debt in calculating a person's credit score, if the medical debt has been paid-off or settled. The measure would require the credit-rating bureaus to remove medical debt from credit reports within 30 days of payoff or settlement.

The bill was introduced in the U.S. House by Ohio Representative Mary Jo Kilroy. The measure moves now on to the Senate. The measure is intended to help people across the country and in Ohio with bad credit scores. Roughly 72 million adults in America are affected by problems concerning medical debt, according to the Commonwealth Fund.

In the U.S. House in May, Rep. Kilroy reportedly told the story of an Ohio student whose credit was damaged after an insurance dispute. The insurance company had disputed whether certain medical bills were covered under the policy. After the dispute was cleared up, the student had a damaged credit rating. One credit card company raised the Ohioan's interest rate from 7 percent to 25 percent because of the medical debt dispute with the insurance company.

Disputes with insurance companies are not the biggest threats to a credit score when it comes to medical debt. Insurance disputes are fairly common. It is when insurance providers send the debt off to a collection agency that credit problems arise. The information is listed on credit bureau reports and may remain on the report for years, even after payment is made or a settlement is reached.

There are times, however, when payment and settlement are not options when dealing with medical debt. It is no secret that bankruptcy filings have been on the increase across the country since the economic crisis began in 2007. But even in a good economy, the high cost of necessary medical care can sometimes force a person to file for bankruptcy relief.

Source: Columbus Dispatch, "Kilroy's debt-reporting bill passes," Jonathan Riskind, 30 Sep 2010

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