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As of January 1, 2026, medical debt will no longer be reported to credit bureaus, providing Oregonians with a protective measure to shield them from the damaging repercussions of poor creditworthiness.
Tidings Data Snapshot
Oregon health costs and unpaid billsSource: Oregon Health Authority summary of “Impact of Health Care Costs on People in Oregon, 2024”DailyTidings.com
Senate Bill 605 ensures that illness no longer automatically leads to poor credit ratings by barring medical debt from consumer credit reports, used by various agencies to assess eligibility for housing, loans, insurance policies, and other financial services.
Oregon lawmakers passed Senate Bill on the premise that medical debt is not an accurate reflection of creditworthiness and is a much-needed step to shield residents from economic instability.
How SB 605 Will Work
Regarded as a landmark consumer protection law, Senate Bill 605 prohibits hospitals, clinics, and other medical providers from reporting unpaid medical bills to credit agencies.
Those agencies, in turn, are barred from exposing consumer medical debt on reports used to evaluate eligibility for loans, housing, jobs, insurance, and other financial services.
Here is a quick read through of what SB 605 does and how it is enforced.
| Provision | What it does | Who it applies to |
|---|---|---|
| Medical debt definition | Covers consumer debt tied to medical services, including related products and devices, and debt linked to medical credit used for health care. | Oregon consumers and covered debts |
| No reporting to credit bureaus | Prohibits any person from reporting medical debt to a consumer reporting agency. | Providers, collectors, furnishers |
| No medical debt on credit reports | Bars consumer reporting agencies from including an item they know or reasonably should know is medical debt. | Credit reporting agencies |
| Enforcement and remedies | Court may declare reported medical debt void and uncollectible, and violations are an unlawful practice tied to UTPA remedies. | Violators under Oregon consumer law |
SB 605 and Medicaid
Although the bill is not directly linked to qualifying for Medicaid (Oregon Health Plan – OHP), it will protect consumers from the financial fallout of high medical costs. This protection is crucial to lower-income earners who rely on OHP for their medical coverage.
SB 605 does not affect Medicaid eligibility. However, it does safeguard members from out-of-pocket expenses. The new legislation also complements programs such as Healthier Oregon, an expansion of the state’s Medicaid, by ensuring that unexpected medical bills do not become insurmountable financial barriers.
Other Key Provisions of the New Legislation
SB 605 protects tenants and employers by barring medical debt from credit reports, a method previously used to assess employment opportunities and rental eligibility.
Existing medical debt will be removed from credit reports.
Violation of the legislation will be treated as unlawful trade practices, allowing consumers to sue for damages.
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