A bipartisan bill has been introduced in the Ohio legislature that would establish a series of consumer protections surrounding the collection of medical debt, including capping interest rates on medical debt, prohibiting credit reporting of medical debts, and protecting consumers from wage garnishments.
Driving the news: State Representatives Michele Grim, a Democrat, and Jean Schmidt, a Republican, introduced House Bill 257, known as the Ohio Medical Debt Fairness Act, during the 2025–2026 legislative session. The bill has four Republican and 22 Democratic co-sponsors.
What it does: House Bill 257 proposes three main protections for Ohio consumers with medical debt:
- Interest Rate Cap: Limits the maximum interest rate on medical debts incurred after the bill’s effective date to 3% per year.
- Credit Reporting Ban: Prohibits healthcare providers and debt collectors from reporting unpaid medical debts to consumer reporting agencies.
- No Wage Garnishment: Bars wage garnishments to collect on medical debts incurred after the bill’s effective date.
Details:
- Patients would still be responsible for paying their medical debts, but these debts could no longer impact their credit scores or result in wage garnishment.
- Any medical debt improperly reported to a credit bureau would be deemed void, and neither the healthcare provider nor the collection agency would be allowed to collect it.
- If a consumer reporting agency fails to remove medical debt information within 30 days of notification, it could be liable for damages of $10 per day after the 30-day period.
The big picture:
- According to data cited by lawmakers, about 20 million Americans owe medical debt, totaling at least $220 billion nationally.
- In Ohio, roughly 9% of adults report having more than $250 in medical debt annually, and nearly 700,000 residents were uninsured as of 2023.
- Current Ohio law allows interest rates on judgments, including medical debt, to be set at 8% per year unless otherwise specified. HB 257 would carve out medical debt and lower the rate to 3%.
What they’re saying: “It doesn’t fix all of our problems,” Grim said in a published report. “But this does make the playing field fairer for all patients.”
