Credit reporting agencies would be prohibited from collecting medical debt, nor would it be included in a consumer's credit report under legislation that will be heading to Gov. Kathy Hochul's desk. 

The measure, given final passage in the state Assembly on Tuesday, is meant to address the estimated millions of people who carry medical debt and its impact on a person's ability to make large purchases or secure a loan to buy a home. 

“Medical debt is a serious problem that creates a crushing burden for many New Yorkers and unfairly undermines their financial security,” said Chuck Bell, the advocacy program director for Consumer Reports. “A bad credit record can make it much more expensive or impossible for a patient to rent a home, buy a car or home, or secure a loan. This bill protects the right of New Yorkers to obtain the health care services they need without fear of having their credit records unfairly ruined.”

National credit reporting agencies do not report medical debts under $500, but many people often receive higher bills than that threshold, Bell said. 

Consumer Reports pointed to a Community Services Society of New York survey that found 41% of New Yorkers have either appealed a medical bill or paid one they didn't think they actually owed, but were fearful of being used or placed into collections. 

The survey also found 38% avoided receiving care or sacrificed necessities because of health care costs.