New Issue Brief Details State Legislative Actions to Address Medical Debt
State Futures and State Health and Value Strategies at Princeton University release new brief as federal policy changes threaten to push millions more Americans into medical debt
Washington, DC — May 18 – Americans are losing their homes, watching their wages garnished, and seeing their credit destroyed — not because of reckless spending, but because they got sick. Nearly 100 million Americans carry medical debt, with the burden falling hardest on Black and Latino communities, rural areas, people with chronic conditions, and states that have not expanded Medicaid. And the problem is about to get worse: the congressional budget reconciliation bill is projected to strip coverage from 10 million people, while the expiration of enhanced premium tax credits is already pushing families into thinner plans with higher out-of-pocket costs.
Today, State Futures in partnership with State Health and Value Strategies at Princeton University released a new issue brief documenting how state legislators are stepping into this gap with concrete strategies to cancel, reduce, and prevent medical debt.
"Healthcare costs are rising faster than inflation, and millions of families are being crushed by debt they never saw coming — an emergency room visit, a cancer diagnosis, the birth of a child," said Gaby Goldstein, President of State Futures. "Washington is making this worse. But states aren't waiting. They're using every tool they have to protect their residents, and this brief shows what's working."
Key state strategies highlighted in the brief include:
Canceling medical debt through budget appropriations. States including Delaware, Illinois, Michigan, Rhode Island, and Vermont have partnered with the nonprofit Undue Medical Debt to purchase and eliminate residents' medical debt for pennies on the dollar.
Banning medical debt from credit reports. 15 states — including California, Colorado, New York, and Maryland — have enacted laws prohibiting the inclusion of medical debt on credit reports, with additional states considering similar legislation.
Curbing predatory debt collection. New York and New Jersey prohibit hospitals from suing patients over medical bills; Delaware bans interest on medical debt entirely; and Colorado, Connecticut, Maryland, and others prohibit collectors from placing liens or foreclosing on patients' homes.
Providing tax relief. Connecticut is considering a personal income tax deduction for canceled medical debt.
Using legislative oversight and hearings as a tool for action. State legislators in Indiana, California, and Hawaii have held hearings to spotlight the impact of medical debt, build bipartisan coalitions, and advance legislation.
A companion brief on state legislative actions to address the underlying health care affordability drivers of medical debt is forthcoming.
Journalists covering medical debt, healthcare policy, economics, or federal-state dynamics are encouraged to read the brief and reach out for interviews. State Futures is available for comment, and can connect press with Princeton collaborators and state policymakers actively pursuing these strategies.
Read the full issue brief:
https://www.statefutures.org/research/medical-debt
About State Futures:
State Futures is a national nonprofit that supports a network of 800+ values-aligned state policymakers, including legislators and State Financial Officers. Through working groups, policy research, and strategic support, State Futures empowers state policymakers to learn from each other, innovate together, and take coordinated action across states.
Media Contact:Carl Kaase, Communicationsinfo@statefutures.orgwww.statefutures.org
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