Starting January 1, a new California law will prevent health providers and debt collectors from reporting medical debt to credit agencies, offering relief to those struggling with unpaid medical bills. This legislation aims to alleviate the financial burden on individuals who often skip necessary medical care due to costs, fearing the impact on their credit scores. While the law does not erase existing debts, it ensures that unpaid medical bills will not adversely affect credit reports, which can lead to higher interest rates and difficulties in securing loans or rentals. The law's author, Sen. Monique Limón, emphasizes that medical emergencies are not choices, thus medical debt should not be penalized. Although the three major credit bureaus have already ceased reporting medical debts under $500, many individuals owe significantly more. This law aligns with similar measures in other states and reflects ongoing efforts to address the financial challenges posed by medical debt.
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