Washington State Moves to Cap Medical Debt Interest Rates

Proposed legislation would limit interest on medical debt to 1%, down from current 9% maximum

Published on Feb. 8, 2026

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The Washington state legislature is considering a bill that would drastically reduce the maximum interest rate on medical debt from 9% to just 1%. The bill, sponsored by Democratic Senator Emily Alvarado, aims to provide relief to the one in five Washingtonians who currently have medical debt. While the bill passed the state Senate, it still needs to clear the House before heading to the governor's desk.

Why it matters

Medical debt can be a major financial burden for families, and high interest rates can make it even harder to pay off. This legislation is an attempt to make medical debt more manageable for Washington residents, though some Republican lawmakers have raised concerns about the potential unintended consequences, such as hospitals passing on costs or even closing down.

The details

Senate Bill 5993 would lower the maximum interest rate on medical debt accrued after December 31, 2026 from the current 9% down to just 1%. Sponsor Senator Emily Alvarado argued that high interest rates "penalize" people who did not plan to get sick, and that there is no evidence that such rates compel faster payment. However, Republican Senator John Braun warned that the legislation could lead to hospitals passing on costs or even closing in some communities.

  • The state Senate passed the bill on Friday, February 8, 2026 after a lengthy floor debate.
  • The bill will now move to the state House, where it could undergo further changes before potentially reaching the governor's desk.
  • The current legislative session in Washington state is scheduled to run until March 12, 2026.

The players

Emily Alvarado

A Democratic state senator from West Seattle who sponsored Senate Bill 5993 to lower the maximum interest rate on medical debt.

John Braun

A Republican state senator from Centralia who expressed concerns about the potential unintended consequences of the medical debt interest rate legislation.

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What they’re saying

“No one plans to get sick. We shouldn't penalize them. And 9% is a penalty.”

— Emily Alvarado, State Senator (komonews.com)

“This isn't about penalizing people. The bottom line is, there is a cost when these medical services are provided, and the question is who's going to cover the cost.”

— John Braun, State Senator (komonews.com)

What’s next

The bill will now move to the state House, where it could undergo further changes before potentially reaching the governor's desk. The current legislative session in Washington state is scheduled to run until March 12, 2026.

The takeaway

This legislation aims to provide much-needed relief to Washington residents struggling with medical debt by drastically reducing the maximum interest rate. However, concerns have been raised about the potential unintended consequences, highlighting the complex nature of addressing medical debt in the healthcare system.