A medical debt credit reporting bill has passed unanimously in the Delaware Senate and appears poised to pass the state House and become law. The bill, Senate Substitute No. 1 for Senate Bill No. 156, would make Delaware one of a growing number of states to prohibit the inclusion of medical debt in consumer credit reports.
Driving the news: The legislation, dubbed the Medical Debt Protection Act, was introduced by Sen. Spiros Mantzavinos and supported by a coalition of lawmakers in both chambers. It aims to prevent medical debt from impacting consumers’ credit scores, housing, or employment opportunities.
- Delaware is looking to join at least nine other states — including California, New Jersey, and Virginia — that have enacted or proposed restrictions on how medical debt can be reported.
The bill includes the following provisions:
- Prohibits reporting of medical debt to consumer reporting agencies under any circumstances.
- Bars consumer reporting agencies from including medical debt in consumer reports if they know or should know it is medical debt.
- Expands protections for consumers by clearly defining terms like “medical debt,” “medical debt buyer,” and “medical debt collector.”
- Prohibits “extraordinary collection actions,” such as selling medical debt without strict consumer protection conditions.
The details: Under the bill:
- “Medical debt” is defined as debt owed for medical services, products, or devices, including bills not yet past due or already paid.
- Medical debt charged to general-use credit cards is excluded from these protections unless the card is issued exclusively for healthcare payments.
- Any communication or reporting of medical debt to a credit bureau is banned from the moment the bill is issued.
- Medical debt buyers must follow specific protocols, including not charging interest and recalling debt if the consumer qualifies for financial assistance.
What’s next: The bill is now under consideration in the Delaware House of Representatives, where it is expected to receive support.
Meanwhile, Gov. Matt Meyer is also pushing a separate initiative to eliminate up to $50 million in medical debt for low-income Delawareans. That program, which would cost the state just $500,000, is not currently in the FY26 budget but remains a priority for the Governor as negotiations continue.
“There are thousands and thousands of Delawareans whose financial well-being… is limited, sometime prohibited, by medical emergencies,” Meyer said in a published report.
If approved, the funds would be used by a nonprofit to purchase medical debt from providers and collectors, relieving more than 17,000 residents who meet income-based eligibility criteria.
