New Health Care Laws Go Into Effect

Laws include consumer medical debt protections and increased transparency of hospital community benefits

DENVER, CO - On August 7, two new health care laws go into effect in Colorado to limit the negative impacts of medical debt on patients’ credit reports or credit score and increase transparency of hospital community benefits.

“After life-saving medical care, patients are often blindsided by medical debt that they can’t keep up with, making it more difficult to qualify for housing, employment, or affordable interest rates,” said Rep. Naquetta Ricks, D-Aurora, sponsor of HB23-1126. “Because of HB23-1126, Coloradans’ credit scores and credit reports will no longer be impacted by outstanding medical debt. I’m proud to have carried this law to protect Colorado patients from having their whole life being negatively impacted by outstanding health care costs.”

“Medical debt, which is often unexpected and accrues rapidly, can have impacts on credit scores and reports even if the debt has been settled with creditors,” said Sen. Tony Exum, Sr., D-Colorado Springs, sponsor of HB23-1126. “This creates barriers for folks trying to access necessities like housing, utilities, and loans, and it needs to change. With our new law, we’re putting in place new consumer protections that will help ensure Coloradans’ financial futures are not unduly impacted by their medical debt.”

Often medical expenses come as a surprise to many patients, leaving people unable to plan for expensive bills. Currently, when someone can’t afford a medical expense, the bill is sent to collections, and that information is shared with consumer reporting agencies that generate consumer reports and credit scores that are used by banks, landlords, employers, and insurance and utility companies. Medical debt affects people of all ages and incomes, but it disproportionately impacts those with a chronic illness or medical condition who rely on continual medical care to maintain their quality of life.

HB23-1126, also sponsored by Representative Ron Weinberg (R-Loveland), adds medical debt to the list of information that consumer reporting agencies are not allowed to include in a credit report, updates exemptions to expand consumer privacy protections, and requires collectors and collecting agencies to notify Coloradans that medical debt will no longer be included in credit reports. These changes will take effect on August 7, 2023.

“We’re making sure that large non-profit hospital systems actually invest in community-based programs that strengthen the services Coloradans need and want,” said Rep. Judy Amabile, D-Boulder, sponsor of HB23-1243. “This law improves accountability surrounding how tax exempt hospitals spend resources in the community, so we can ensure Coloradans can access critical services that reduce their health care costs and help them lead healthier lives.”

“Non-profit hospitals have the opportunity to provide much needed benefits back to their community,” said Senate Majority Leader Dominick Moreno, D-Commerce City, sponsor of HB23-1243. “House Bill 1243 works to ensure the public’s concerns are heard when hospitals are determining what benefits to provide to their community. This new law requires greater transparency from hospitals about what benefits are being funded and how community feedback is being implemented, ensuring Coloradans have access to the unique services they need.”

Beginning on August 7, HB23-1243 centers on increasing the transparency of nonprofit hospitals’ community benefit spending through incorporating community feedback into the community benefit implementation plan.

The law also requires each reporting hospital to seek feedback and engagement from a diverse range of community members during its annual proposed community benefit implementation plan, submit a detailed report about any discussions or decisions at the annual meeting, make the report public, and execute a community benefit plan that addresses the needs of the community as discussed in the annual meeting to better understand the impact community benefit spending has on the health of Coloradans and what the greatest needs are.