The Governor of Virginia has signed a medical debt collection bill into law that will place limits on how healthcare debts owed by Virginians are able to be collected.
Driving the news: Virginia Governor Glenn Youngkin has signed HB 1725, also known as the Medical Debt Protection Act, into law. The legislation introduces new restrictions on the collection of medical debts, seeking to protect patients from aggressive collection practices and additional financial hardship.
Key details:
- Interest and Late Fees: The law caps interest and late fees on medical debt at 3% annually. Additionally, late fees cannot be assessed until 90 days after the due date of the final invoice.
- Extraordinary Collection Actions: For individuals who are eligible for financial assistance, the law prohibits:
- Causing an individual’s arrest,
- Foreclosing on real property,
- Placing liens on personal property, and
- Garnishing wages.
- Eligibility for Protection: The prohibitions apply specifically to debtors who meet the criteria for financial assistance, offering enhanced protections to the most vulnerable populations.
Between the lines: The bill received bipartisan support in both chambers of the Virginia General Assembly. Its final version was shaped through extensive negotiations with stakeholders, including medical professionals, patient advocacy groups, and representatives from the debt collection industry.
Zoom out: Rep. Karrie Delaney, who sponsored the bill, described the law as a “significant step toward ensuring financial stability for Virginians burdened by medical debt,” highlighting that the measure aims to provide relief and prevent individuals from losing their homes or facing arrest due to unpaid medical bills.
What’s next: The law will take effect July 1, 2025.
