Here is a detailed briefing document reviewing the main themes and most important ideas or facts from the provided source, H. B. No. 257, the “Ohio Medical Debt Fairness Act,” as introduced in the 136th General Assembly of Ohio:
Briefing Document: Ohio Medical Debt Fairness Act (H. B. No. 257)
Date: [Date of Briefing – e.g., October 26, 2023] Subject: Review of H. B. No. 257, “Ohio Medical Debt Fairness Act,” limiting interest on medical debt, prohibiting reporting to consumer reporting agencies, and restricting garnishment. Source: Excerpts from the As Introduced version of H. B. No. 257, 136th General Assembly of the State of Ohio.
I. Executive Summary
H. B. No. 257, titled the “Ohio Medical Debt Fairness Act,” is a proposed bill in the Ohio General Assembly aimed at providing relief to individuals facing medical debt. The core provisions of the bill are:
- Limiting the interest rate that can be charged on medical debt incurred on or after the act’s effective date to a maximum of three percent per annum.
- Prohibiting healthcare providers and collection agencies from reporting medical debt incurred on or after the effective date to consumer reporting agencies for inclusion in a consumer’s credit file or credit report.
- Prohibiting consumer reporting agencies from including information about unpaid medical debt incurred on or after the effective date in a consumer’s credit file or credit report.
- Prohibiting the garnishment of personal earnings for the collection of medical debt incurred on or after the effective date.
The bill also includes definitions related to medical debt and clarifies existing regulations regarding interest rates and garnishment in the context of these new provisions.
II. Main Themes and Key Provisions
The central themes of H. B. No. 257 are the protection of consumers from potentially excessive burdens associated with medical debt and the removal of medical debt as a negative factor in credit reporting and wage garnishment processes.
A. Interest Rate Limitation on Medical Debt:
- The bill significantly alters the general interest rate limitations in Ohio law (Section 1343.01 and 1343.03) specifically for medical debt.
- Key Provision: Section 1343.01(C)(2) states: “Notwithstanding any contrary provision of the Revised Code, the rate of interest drawn upon medical debt incurred on or after the effective date of this amendment shall not exceed three per cent per annum.”
- Key Provision: Section 1343.03(E)(2) reinforces this, stating: “The rate of interest on a judgment, decree, or order for the payment of a medical debt incurred on or after the effective date of this amendment shall not exceed three per cent per annum.”
- This establishes a considerably lower maximum interest rate for medical debt compared to the general eight percent rate or higher rates allowed under specific conditions for other types of debt.
B. Prohibition on Reporting Medical Debt to Consumer Reporting Agencies:
- The bill directly addresses the impact of medical debt on consumer credit scores and reports.
- Key Provision: Section 1349.54(B)(1) states: “No health care provider or collection agency shall report to a consumer reporting agency any information relative to the nonpayment of medical debt incurred on or after the effective date of this section for inclusion in a consumer’s credit file or credit report.”
- Key Provision: Section 1349.54(C)(1) states: “No consumer reporting agency shall include in a consumer’s credit file or credit report any information relative to the nonpayment of medical debt incurred on or after the effective date of this section.”
- This means that medical debt incurred after the effective date of the act cannot be used to negatively impact an individual’s credit history or score.
- The bill outlines consumer remedies if a violation occurs, including civil action and voiding of the reported debt (Section 1349.54(B)(2)-(3) and (C)(2)-(4)).
C. Prohibition on Garnishment of Personal Earnings for Medical Debt:
- The bill introduces a specific exemption for medical debt within the established rules for garnishment of personal earnings in Ohio (Section 2716).
- Key Provision: Section 2716.03(D)(2) states: “No proceeding in garnishment of personal earnings shall be brought against a judgment debtor for the collection of a medical debt incurred on or after the effective date of this amendment.”
- This provision prevents creditors from using wage garnishment as a method to collect medical debt incurred after the bill’s effective date.
D. Definitions Related to Medical Debt:
- The bill introduces specific definitions crucial to the application of the new provisions.
- Key Provision: Section 1349.54(A)(6) defines “Medical debt” as “an obligation of a consumer to pay an amount for the receipt of health care services, products, or devices including hospital, surgical, and medical expenses, as those terms are used in section 1349.01 of the Revised Code.”
- Key Provision: Section 1349.54(A)(5) defines “Incur,” with respect to medical debt, as “the date a health care provider or its designee first sends the consumer, patient guarantor, or third-party payer a bill for health care services, products, or devices.” This is the crucial date for determining if the new regulations apply.
E. Amendments to Existing Statutes:
- The bill proposes amendments to several sections of the Revised Code (1343.01, 1343.03, 1349.01, 2716.02, 2716.03, and 4712.01) to incorporate the new provisions regarding medical debt.
- Amendments to Sections 1343.01 and 1343.03 introduce the interest rate limitation for medical debt.
- Amendments to Section 1349.01 are related to the prohibition of reporting to consumer reporting agencies, expanding upon existing provisions regarding reporting debt related to failure to obtain health insurance coverage.
- Amendments to Sections 2716.02 and 2716.03 incorporate the prohibition of garnishment for medical debt and make minor technical changes to existing garnishment notice forms and processes (e.g., updating cross-references).
- Amendments to Section 4712.01 update a cross-reference to the definition of “budget and debt counseling service” due to the restructuring of Section 2716.03.
III. Important Facts
- The bill is titled the “Ohio Medical Debt Fairness Act.”
- The new provisions apply specifically to medical debt incurred on or after the effective date of the act.
- “Incurred” is defined by the date the first bill for services, products, or devices is sent.
- The bill affects healthcare providers, collection agencies, and consumer reporting agencies.
- The limitations apply to both the interest rate charged on the debt itself and the interest rate on any subsequent judgment or order for the payment of medical debt.
- Consumers are provided with explicit civil action rights if their medical debt is improperly reported to a consumer reporting agency. If successful, the court can void the reported debt.
- Medical debt is explicitly excluded from the types of debt for which personal earnings can be garnished.
IV. Potential Implications
Passage of H. B. No. 257 would have significant implications for both consumers and the healthcare and debt collection industries in Ohio:
- For Consumers: Reduced financial burden due to lower interest rates, protection of credit scores from the impact of medical debt, and removal of wage garnishment as a collection method for future medical debt.
- For Healthcare Providers and Collection Agencies: Changes to billing and collection practices, particularly regarding interest calculation and reporting to credit bureaus. Potential need to adjust collection strategies due to the garnishment prohibition.
- For Consumer Reporting Agencies: Requirement to exclude medical debt incurred after the effective date from credit reports and implement processes for removing such information if improperly reported.
This briefing document provides a high-level overview of the key components of H. B. No. 257 as introduced. Further analysis would require examining the full text of the bill and potential amendments as it progresses through the legislative process.