A medical debt credit reporting law took effect today in Delaware, eliminating the ability to include medical debt in consumer credit reports — a sweeping protection aimed at easing financial burdens tied to illness and emergency care.
What it does: Senate Substitute No. 1 for Senate Bill 156, known as the Medical Debt Protection Act, officially became law 90 days after being signed by Governor Matt Meyer on July 29. The legislation:
- Prohibits medical creditors, debt buyers, and debt collectors from reporting medical debt to any consumer reporting agency.
- Bars credit reporting agencies from including any known or knowable medical debt on a consumer report.
- Covers medical debt that is owed for healthcare services, products, or devices, including bills that are not yet due or have already been paid.
- Excludes medical debt charged to general-purpose credit cards, unless issued exclusively for healthcare expensesEngrossment.
🗣️ What they’re saying: “With this law now in effect, we’re helping thousands of Delawareans breathe a little easier and ensure that no one’s financial future is destroyed because they got sick or needed care,” said Gov. Matt Meyer.
Sen. Spiros Mantzavinos, the bill’s sponsor, emphasized the broad impact of medical debt:
“We are all just one accident or one diagnosis away from being in an entirely catastrophic financial position,” he said. “SB 156 is an important update that prevents those experiencing medical debt from facing additional obstacles.”
Rep. Kim Williams, the bill’s lead House sponsor, noted the added urgency:
“With ACA subsidies expiring soon, those costs are about to become even more unaffordable for many families… This gives thousands of Delawareans a fresh start.”
💸 Related initiative: Medical debt relief: At the bill’s signing, Gov. Meyer also announced a $500,000 state-funded partnership with national nonprofit Undue Medical Debt to eliminate up to $50 million in existing medical debt for more than 17,000 Delawareans.
- Debt will be purchased in bulk from providers and wiped out — with no application process required.
- Residents qualify if their income is below 400% of the federal poverty level (about $100,000 for a family of three) or if their medical debt exceeds 5% of their annual income.
Letters confirming debt cancellation will begin arriving in mailboxes over the coming weeks.
🗺️ Big picture: Delaware joins at least nine other states, including California, New Jersey, and Virginia. that have passed laws restricting or banning the use of medical debt in credit reporting.
