New WA law prohibits medical debt reporting on credit scores

OLYMPIA — Credit scores will soon no longer be affected by medical debt in Washington state under a new bill signed into law Tuesday. 

Senate Bill 5480, sponsored by Sen. Marcus Riccelli, D-Spokane, prohibits collection agencies and health care providers and facilities from reporting medical debt to consumer credit reporting agencies.

In a written statement Tuesday, Riccelli said that rising costs, especially related to health care, are one of the top concerns in his district. 

“This bill will ensure that people in our state who have a medical emergency will be better protected from a credit rating change that can threaten basic needs like buying a car, renting an apartment, or even getting a job,” Riccelli said. “No one should have to endure financial ruin to seek life-saving care, especially when so many people are struggling to afford the basics.”

While some Republicans in the Senate supported the measure, no Republicans in the House voted in favor of the proposal. 

During the bill signing Tuesday, Gov. Bob Ferguson noted that the law does not erase medical debt, but instead “removes barriers” by lessening its impact on credit scores — a “huge issue,” he said, in Washington and across the country.

Former President Joe Biden implemented a similar policy nationwide but President Donald Trump put the policy on hold before it went into effect in March.

According to the Consumer Financial Protection Bureau, inaccurate medical billing data is common and medical debt accounts for the largest source of debt reported to collection agencies. Repercussions can include reduced access to credit, medical care avoidance and difficulty finding employment, the CFPB said. Although many Americans have access to health insurance, the high cost of health care and high deductibles contributes to medical debt. 

The law will go into effect July 27.