Michigan Passes Bipartisan Medical Debt Relief Bills

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The Michigan State Senate has unanimously passed a series of bills aimed at tackling the growing issue of medical debt. The new legislation caps interest rates on medical debt at 3% annually, prohibits aggressive collection tactics like wage garnishment and home foreclosure, prevents medical debt from appearing on credit reports, and requires hospitals to establish standardized financial assistance programs for uninsured patients.

Why it matters

Medical debt is a pervasive problem affecting an estimated 700,000 Michiganders and 1 in 10 Americans nationwide. The current system often leaves patients vulnerable to high interest rates, predatory collections practices, and negative impacts on their credit. This bipartisan legislation in Michigan directly addresses these issues and could foreshadow a broader national shift in how we approach healthcare affordability.

The details

The core of the new legislation focuses on patient protection. Senate Bill 701, known as the Medical Debt Protection Act, and the Hospital Financial Assistance Act, introduce the following key provisions: Interest Rate Caps - Limiting interest rates and late fees on medical debt to 3% annually. Collection Restrictions - Prohibiting actions like wage garnishment, home foreclosure, and arrests related to medical debt. Credit Reporting Limits - Preventing medical debt from appearing on credit reports. Financial Assistance Programs - Requiring hospitals to establish standardized financial assistance programs for uninsured patients.

• The Michigan State Senate unanimously passed the bills this week.
• The legislation is expected to be signed into law in the coming weeks.

What they’re saying

What’s next

The bills are expected to be signed into law in the coming weeks, at which point the new protections and requirements will go into effect.