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.]