After the federal rule that would have removed medical debt from credit reports was vacated in 2025, state-level policymaking has accelerated, with more than 30 states considering medical debt protections. States are increasingly limiting actions against patients like wage garnishment, property liens and other collection practices while requiring clearer financial assistance notices and patient screenings. More than one in four U.S. adults reported that they or a family member owed significant medical debt, with 15% saying they had no way to pay their bill. Within the AHPA footprint, many states have taken action to relieve the burden of medical debt, including Oregon, California and Washington state. In Illinois, hospitals must screen uninsured patients for financial assistance before pursuing collections, including assessing based on presumptive criteria like income.  

Scrutiny has renewed around hospitals’ billing practices. The Lown Institute’s recent Past Due white paper found wide variation in hospital practices. In the companion Financial Assistance and Debt Collection report, Lown surveyed more than 2,500 hospitals and found hospitals denying nonemergency care and putting liens on patients’ homes for unpaid medical bills. Searchable hospital-level datasets make it easy for politicians, journalists and patient advocacy groups to compare hospital financial practices – raising additional scrutiny on hospitals’ collection practices.  

Many AHPA states are considering legislation or engaging in conversations to help address the issue. Common themes include requiring patient financial assistance screenings, giving grace periods before medical bills are assigned to collections, debt forgiveness programs, and other protections for lower-income patients.  

  • California: Beginning July 1, 2027, California law AB 1312 requires all California hospitals to perform financial assistance screening and make presumptive eligibility determinations before sending a first bill.  
  • Colorado: Through HB26-1267, the legislature considered additional restrictions on medical debt wage garnishment this year, but the bill didn’t advance. In September, the state enforced its 2023 medical debt law (SB 23-093) against a collection agency, resulting in a $30,000 settlement.  
  • Florida: Considered protections early this year but both bills died in committee on March 13th. They involved protections for lower-income patients and those complying with payment plans. Also required financial assistance screenings before collections. 
  • Hawaii: In July 2026, the state signed into law a medical-debt forgiveness measure that created a state program to purchase and forgive qualifying debt. The initial round of forgiveness is expected to begin mid-2027. An FAQ on this program can be found here.  
  • Illinois: The state’s Medical Debt Relief program has eliminated more than $1 billion in debt for residents and barred medical debt from appearing on consumer credit reports. Illinois committed to purchase and forgive qualifying debt for residents earning up to 400% of the federal poverty level or those whose debt equals at least 5% of their household income.  
  • Kansas: Medical debt is becoming a hot issue in Kansas after reports targeting U.S. Senator Marshall’s debt collection practices as a physician. Here is an example of the discussions taking place. Earlier in the year, Kansas also considered legislation requiring hospitals to conduct a screening on all uninsured patients no later than 90 calendar days after discharge. 
  • Kentucky: Governor Andy Beshear signed Executive Order 2026-600 on September 15, 2026, directing the Secretary of the Finance and Administration Cabinet to transfer $2.5 million to Undue Medical Debt, a national nonprofit that purchases and abolishes medical debt, to erase $250 million in medical debt for an estimated 130,000 eligible Kentuckians. More details here.  
  • Maryland: Began prohibiting medical debt credit reporting in October 2025 and requires agreements entered on or after that date between medical providers and collection agencies to include a provision prohibiting the disclosure of medical debt to the agency. Failure to include that provision would deem the contract void.  
  • Ohio: Ohio’s proposal would cap interest and prohibit credit reporting. 
  • Oregon: Enacted protections barring providers and collections agencies from reporting medical debt to credit bureaus and requiring hospitals to screen patients for financial assistance before collections. 
  • Washington: Adopted a 120-day delay before certain accident-related medical bills can be assigned to collectors. Lawmakers are also considering broader credit reporting protections. 

For more detailed information about state protections on medical debt, click here.  

Topics: Access to Care