04/30/2025 03:15 PM House LABOR & COMMERCE

         HB 178-MEDICAL DEBT: INFORMATION, DISCRIMINATION                                                                   
                                                                                                                                
4:35:33 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FIELDS announced  that the next order  of business would                                                               
be  HOUSE BILL  NO. 178,  "An Act  relating to  medical debt  and                                                               
consumer  credit reporting  agencies; relating  to discriminatory                                                               
practices based  on the medical  debt of a person;  and providing                                                               
for an effective date."                                                                                                         
                                                                                                                                
4:36:00 PM                                                                                                                    
                                                                                                                                
BRAD  LIPTON,  Senior  Fellow,  Consumer  Federation  of  America                                                               
(CFA), gave invited testimony in support  of HB 178.  He asserted                                                               
that HB  178 would represent  a step  forward in creating  a fair                                                               
credit  reporting system  that accurately  reflects a  consumer's                                                               
creditworthiness  while  protecting  them   from  the  burden  of                                                               
medical debt.   He noted  that credit reports are  very important                                                               
for millions of  Americans in purchasing a home,  a car, starting                                                               
a  business, applying  for  a job,  et cetera.    He referred  to                                                               
literature   asserting  that   medical  debt   was  fundamentally                                                               
different from other  types of debt and not  a reliable indicator                                                               
of  credit worthiness.    He noted  that  the Consumer  Financial                                                               
Protection  Bureau  (CFPB)  recently   proposed  a  rule  banning                                                               
medical debt  from credit reports;  however, he stated  that this                                                               
rule is  facing ongoing  legal challenges.   He reported  that 11                                                               
states  have passed  legislation to  address medical  debt credit                                                               
reporting.   He asserted that  states have the authority  to pass                                                               
legislation without facing federal  preemption.  He asserted that                                                               
HB 178 would  help thousands of residents in  Alaska dealing with                                                               
medical   debt,  particularly   communities  that   already  face                                                               
economic barriers.  He welcomed questions from the committee.                                                                   
                                                                                                                                
4:38:27 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  FIELDS asked  for  confirmation that,  were  HB 178  to                                                               
become  law,  healthcare  providers could  still  collect  unpaid                                                               
bills from individuals who received care at their facilities.                                                                   
                                                                                                                                
4:38:39 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GENEVIEVE  MINA,  Alaska  State  Legislature,  as                                                               
prime  sponsor, confirmed  that  was correct  and further  stated                                                               
that HB 178 would not  relieve individuals of their medical debt.                                                               
Rather, she explained that the  proposed legislation was intended                                                               
to ensure  that medical debt  would not influence  credit scores,                                                               
or an  individual's ability to  find housing or employment.   She                                                               
noted that debt  collectors could still, under HB  178, use other                                                               
enforcement  mechanisms to  collect debt,  such as  garnishing an                                                               
Alaska resident's permanent fund dividend (PFD) check.                                                                          
                                                                                                                                
[HB 178 was set aside and taken up later.]                                                                                      
                                                                                                                                
        HB 178-MEDICAL DEBT: INFORMATION, DISCRIMINATION                                                                    
                                                                                                                                
4:41:20 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FIELDS [announced that the  next order of business would                                                               
be a  return to HOUSE BILL  NO. 178, "An Act  relating to medical                                                               
debt  and   consumer  credit  reporting  agencies;   relating  to                                                               
discriminatory practices based  on the medical debt  of a person;                                                               
and providing for an effective date."]                                                                                          
                                                                                                                                
CO-CHAIR FIELDS opened public testimony on HB 178.                                                                              
                                                                                                                                
4:42:00 PM                                                                                                                    
                                                                                                                                
JESSICA PARKS,  Chief Operating  Officer, Anchorage  Coalition to                                                               
End Homelessness  (ACEH), testified  in support of  HB 178.   She                                                               
explained  that ACEH  leads Anchorage's  coordinated response  to                                                               
homelessness  in  the  implementation   of  Anchorage  Home,  the                                                               
community's  strategic plan  that  envisions  homelessness to  be                                                               
"brief, rare, and one-time."   She further explained that a tenet                                                               
of  the strategic  plan was  decreasing barriers  to housing  for                                                               
vulnerable populations.   She asserted that HB  178 would address                                                               
one   barrier  to   housing,  medical   debt,  which,   she  said                                                               
disproportionately  affected low-income  individuals, communities                                                               
of color,  and homeless or  individuals at-risk  of homelessness.                                                               
She  reported  that two-thirds  of  bankruptcies  are related  to                                                               
medical  issues  across  the  U.S.     She  cited  the  2022  KFF                                                               
Healthcare  Debt Survey,  stating that  one in  five people  with                                                               
medical  debt  had to  change  their  living situation,  such  as                                                               
moving in  with family  or friends.   She  cited a  University of                                                               
Washington  study  that  found medical  debt  contributed  to  an                                                               
additional  two years  of  homelessness  in Seattle,  Washington.                                                               
She explained that  HB 178 would remove medical  debt from credit                                                               
reports and  would additionally prohibit landlords  and employers                                                               
from refusing an  individual due to medical debt.   She concluded                                                               
by  thanking Representative  Mina for  introducing the  "forward-                                                               
thinking" legislation that  would remove discriminatory practices                                                               
that  were  tied to  medical  debt  and welcomed  questions  from                                                               
committee members.                                                                                                              
                                                                                                                                
4:44:16 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   SADDLER   queried   the   relationship   between                                                               
homelessness and credit rates, asking which came first.                                                                         
                                                                                                                                
MS. PARKS replied that many  people enter homelessness because of                                                               
financial  difficulties  and  no  longer  being  able  to  afford                                                               
housing.    She  said  that  many  people  who  are  experiencing                                                               
homelessness   have   subsequent   financial   difficulties   and                                                               
experience impacts on their credit.                                                                                             
                                                                                                                                
4:45:20 PM                                                                                                                    
                                                                                                                                
KRIS  QUIGLEY,  Director,  Government  Relations,  Consumer  Data                                                               
Industry Association  (CDA), testified  in opposition to  HB 178.                                                               
She  clarified that  her organization  opposed Section  4 of  the                                                               
proposed  legislation.    She  explained  that  her  organization                                                               
represents  consumer  reporting agencies,  including  nationwide,                                                               
regional,  and   specialized  credit   bureaus  in   addition  to                                                               
background  check companies.   She  stated that  the Fair  Credit                                                               
Reporting  Act  contains   preemption  provisions  that  prohibit                                                               
states from regulating areas of  consumer reporting under federal                                                               
law.     She  asserted  that   HB  178  conflicts   with  federal                                                               
provisions.  She asserted that  CFPB lacks the legal authority to                                                               
prohibit  creditors  from considering  medical  debt  as well  as                                                               
dictating the  contents of  what is  included in  credit reports.                                                               
She  explained that  Congress  established  a detailed  framework                                                               
that governs the  contents of credit reporting which  is laid out                                                               
in the  Fair Credit  Reporting Act.   She  thanked Representative                                                               
Mina  for  meeting with  her  lobbyists  in Alaska  and  welcomed                                                               
questions from the committee.                                                                                                   
                                                                                                                                
4:46:59 PM                                                                                                                    
                                                                                                                                
MS. QUIGLEY, in response to  Representative Saddler's question on                                                               
federal  preemption  and  documentation, stated  that  she  would                                                               
forward information to the committee members.                                                                                   
                                                                                                                                
4:48:12 PM                                                                                                                    
                                                                                                                                
CLARK  HANSON, Managing  Director of  Advocacy, ALS  Association,                                                               
testified  in support  of HB  178.   He stated  that he  provided                                                               
invited  testimony  in  a previous  hearing  and  reiterated  his                                                               
organization's support  for HB  178.  He  further stated  that he                                                               
was available for questions.                                                                                                    
                                                                                                                                
4:48:40 PM                                                                                                                    
                                                                                                                                
EMILY  NENON,  Director,  Alaska Government  Relations,  American                                                               
Cancer  Society Cancer  Action Network  (ACS  CAN), testified  in                                                               
support of HB  178.  She echoed other speakers  in asserting that                                                               
medical  debt was  unlike  other forms  of debt  in  that no  one                                                               
chooses to become ill.   She noted that her organization conducts                                                               
periodic surveys  of cancer patients  and survivors  and reported                                                               
that  they  did  a  nationwide  survey  specifically  related  to                                                               
medical  debt.   She reported  that  half of  those surveyed  had                                                               
medical  debt related  to  cancer, despite  98  percent of  those                                                               
surveyed having  insurance at the  time of their diagnoses.   She                                                               
stated  that medical  bills are  often confusing  and inaccurate,                                                               
and reported that  medical bills are disputed at  three times the                                                               
rate  of credit  card debt.    She asserted  that adverse  credit                                                               
reporting creates  stress for the  patient.  She echoed  the bill                                                               
sponsor, noting  that patients are  still responsible  for paying                                                               
their medical bills.                                                                                                            
                                                                                                                                
4:50:49 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER  noted   that  major  reporting  agencies                                                               
mutually agreed to not include the  first $500 of medical debt in                                                               
credit  reports.   He  asked what  effect that  might  have on  a                                                               
person.                                                                                                                         
                                                                                                                                
MS. NENON responded that she did not have that information.                                                                     
                                                                                                                                
REPRESENTATIVE  SADDLER noted  the argument  that the  absence of                                                               
any reporting of  medical debt is beneficial.   He suggested that                                                               
an incremental reduction of medical  debt reporting could have an                                                               
incremental benefit.                                                                                                            
                                                                                                                                
4:51:59 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FIELDS  asked whether Alaska was  preempted from passing                                                               
HB 178.                                                                                                                         
                                                                                                                                
BRAD  LIPTON,  Senior  Fellow,  Consumer  Federation  of  America                                                               
(CFA), answered  no.   He stated that  the Fair  Credit Reporting                                                               
Act  does have  a preemption  provision but  stated that  federal                                                               
standard was "a floor, not a  ceiling."  He noted that items that                                                               
appear  on a  credit  report  are not  federally  preempted.   He                                                               
further  referred to  a case  out of  the First  Circuit, CDA  v.                                                             
Frey,  where CDA  unsuccessfully  sued Maine  for preempting  the                                                             
Fair Credit Reporting Act.                                                                                                      
                                                                                                                                
4:53:08 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  HALL  asked  if  CFPB  had  enforcement  or  regulatory                                                               
authority.                                                                                                                      
                                                                                                                                
MR. LIPTON responded  that both states and  CFPB have enforcement                                                               
and regulation capacities.                                                                                                      
                                                                                                                                
4:53:33 PM                                                                                                                    
                                                                                                                                
MR.  LIPTON,  in  response  to  a  question  from  Representative                                                               
Saddler,  repeated that,  under  the Fair  Credit Reporting  Act,                                                               
there was no  "preemption of state medical  debt credit reporting                                                               
bans."   He noted that  there are  preempted topics, such  as how                                                               
long  information can  appear on  a  credit report.   He  further                                                               
noted  that the  states can  regulate  the contents  of a  credit                                                               
report  but  stated  that  there   has  been  a  fair  amount  of                                                               
litigation.                                                                                                                     
                                                                                                                                
REPRESENTATIVE  SADDLER requested  documentation  to support  Mr.                                                               
Lipton's response.                                                                                                              
                                                                                                                                
4:55:33 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FIELDS,  after ascertaining that  there was no  one else                                                               
who wished to testify, closed public testimony on HB 178.                                                                       
                                                                                                                                
[HB 178 was held over.]