As Trump Punts on Medical Debt, Battle Over Patient Protections Moves to States
With federal action stalled, a wave of states are grappling with legislation aimed at shielding patients from the crushing burden of medical debt. The push for state-level protections comes as advocates express concern over potential increases in the uninsured population following recent tax law changes.
Several states have recently considered or enacted measures to address the issue. Indiana (SB0317/2025), Montana (LC1385), and Nevada (Bill 12174) are among those seeing legislative action. These efforts, however, are facing significant resistance from debt collectors, the credit reporting industry, and banks. Opponents argue that limiting access to medical debt information could lead to riskier lending practices.
In Maine, the Consumer Data Industry Association, representing credit bureaus, urged lawmakers to defer to the federal government, stating, “Only national, uniform standards can achieve the dual goals of protecting consumers and maintaining accurate credit reports,” according to Zachary Taylor, the group’s government relations director, in testimony before the legislature.
Similar concerns were voiced in South Dakota.State Representative lana Greenfield, a Republican, warned that small-town banks might unknowingly extend loans to individuals with substantial, undisclosed medical bills. “Small-town banks could not receive information on a mega, mega medical bill. And so, they would in good faith perhaps loan money to somebody without knowing what thier credit was,” she stated on the House floor.
These industry objections stand in contrast to research from the Consumer Financial Protection Bureau (CFPB). A 2014 CFPB report found that medical debt is not a reliable indicator of a person’s creditworthiness, unlike other forms of debt.
Despite this evidence, the influence of the financial industry proved potent in South Dakota. Representative brian Mulder, a Republican and chair of the health committee, acknowledged the power of banking interests in the state, a known hub for financial institutions due to its favorable regulations.
Montana saw a bill aimed at protecting a portion of debtors’ assets from garnishment pass a committee, with supporters hoping it would especially benefit Native American patients, who are disproportionately affected by medical debt, according to KFF Health News. However, the bill ultimately failed on the House floor after a last-minute lobbying effort by opponents.Representative Ed Stafman, a Democrat who authored the bill, described how opponents “showed up en masse,” engaging Republican lawmakers individually and ultimately securing enough votes to defeat the measure.
Despite setbacks, advocates remain optimistic. Lucy Culp, who oversees state lobbying for Blood Cancer United (formerly the Leukemia & Lymphoma Society), noted that “These things can sometiems take time.” Her organization has been actively pushing for state-level medical debt protections, including in Montana and South Dakota.
There are also indications of potential progress in traditionally conservative states. In texas, a proposal (HB3708/2025) to require nonprofit hospitals to expand financial assistance to patients with large bills has garnered support from leading conservative organizations.
however, Culp expressed deeper concern about the anticipated increase in uninsured Americans due to cutbacks in the recently passed GOP tax law, predicting a worsening of the nation’s medical debt crisis.”States are not ready for that,” she warned.
