States Push New Medical Debt Relief Measures as Healthcare Costs Continue to Rise

A growing number of U.S. states are adopting new laws to ease the burden of medical debt as millions of Americans continue to struggle with healthcare costs.

According to a report released Wednesday by the nonpartisan think tank United States of Care, lawmakers in at least six states approved legislation this year addressing different aspects of medical debt, ranging from debt collection practices and interest rate limits to financial assistance requirements and wage garnishment protections.

The legislative activity comes as affordability remains a major concern nationwide. A recent survey found that 46% of U.S. adults reported having difficulty paying for medical care during the past year, regardless of whether they had health insurance.

Indiana, Louisiana, Maine, Oregon, and Washington have already enacted medical debt-related legislation in 2026. Hawaii has also approved a measure that is awaiting the governor’s signature, while several additional proposals remain under consideration in other states.

States Take Different Approaches to Medical Debt Reform

Rather than adopting a single nationwide strategy, states are pursuing different legislative approaches to reduce the financial impact of medical debt on consumers.

Louisiana enacted legislation limiting the amount of interest that healthcare providers and debt collectors can charge on certain medical debt. The new law caps annual interest rates at 3% for debt related to medically necessary care. The legislation defines medically necessary care as services or medications that a licensed healthcare provider determines are needed to prevent, diagnose, or treat an illness or its symptoms.

Washington lawmakers focused on delaying debt collection activity for patients injured in traffic accidents. Under the state’s new law, unpaid medical bills involving pedestrians or bicyclists struck by motor vehicles cannot be assigned to a debt collector until at least 120 days after the patient’s first billing statement.

Maine also strengthened consumer protections by prohibiting wage or salary garnishment to collect medical debt. Meanwhile, Hawaii’s legislature approved a medical debt reform legislation that is now awaiting final action from the governor.

Indiana Expands Financial Assistance Requirements

Indiana adopted bipartisan legislation designed to improve patient awareness of hospital financial assistance programs before collection efforts begin.

The new law requires hospitals to notify patients about financial assistance programs they may qualify for before initiating debt collection. Hospitals must also prominently display information about those programs within their facilities, making financial aid options more visible to patients.

The legislation includes an additional consumer protection unrelated to medical debt collection. It prohibits healthcare providers from using automated tools to submit health insurance benefit claims unless a provider has first reviewed those claims.

Supporters say these measures could help eligible patients access financial assistance sooner and reduce the likelihood of avoidable medical debt.

Credit Reporting and Facility Fees Remain Legislative Priorities

Several states are also considering measures that would limit how medical debt affects consumers’ credit histories.

Last year, Alaska State Representative Genevieve Mina introduced legislation that would prevent medical debt from appearing on consumer credit reports. Michigan lawmakers have introduced similar legislation, which has advanced for additional consideration.

Massachusetts is also pursuing changes in this area. On Tuesday, Governor Maura Healey proposed legislation that would prevent medical debt from being reported to consumer credit reporting agencies, adding another state to the growing list examining credit reporting reforms.

Separately, New Mexico enacted legislation restricting certain hospital facility fees. The law prohibits hospitals from charging facility fees for preventive outpatient services, vaccinations and telehealth appointments while continuing to allow those fees for inpatient and emergency care.

Broader Healthcare Affordability Efforts Continue

Medical debt legislation is part of a broader effort by state lawmakers to address healthcare affordability.

According to the United States of Care report, legislators in 18 states introduced or approved measures intended to preserve access to no-cost preventive care. Another 12 states considered legislation addressing hospital facility fees, reflecting continued concern over the cost of healthcare services beyond traditional insurance coverage.

Although each state has adopted different policy solutions, the overall trend points toward increased scrutiny of medical debt collection practices and greater emphasis on consumer protections.

As healthcare costs remain a significant financial challenge for many Americans, additional states are expected to continue evaluating legislation aimed at reducing the long-term impact of medical debt on patients and their families.