A bill has been introduced in the Massachusetts legislature that updates and amalgamates a series of bills related to medical debt collection. The legislation would create sweeping new rules that directly affect how medical debts can be collected, reported, sold, and enforced in the state.
The measure, filed as House Bill 4809, pulls together several earlier proposals focused on relieving the burden of medical debt on consumers. If enacted, the bill would create a new Medical Debt Protection Act, impose new limits on collection activity, restrict credit reporting, overhaul garnishment rules, and require clearer disclosure of debt collection policies by healthcare entities.
The background: The legislation stems from multiple petitions submitted by lawmakers seeking to reduce the financial strain that medical debt places on patients and families. Those petitions addressed issues such as whether medical debt should be included in credit reporting, how aggressively medical creditors could pursue collection, and what protections should be available for consumers facing lawsuits over medical bills. The new consolidated bill provides a single framework for resolving those questions and introduces heightened consumer protections targeted specifically at medical debts.
The details of the bill: The proposal creates significant restrictions on how medical debts can be handled. Among the most notable provisions:
- Medical creditors and medical debt collectors would be prohibited from selling medical debt to debt buyers.
- Medical debt could not be furnished to any consumer reporting agency, effectively removing it entirely from credit reports.
- Extraordinary collection actions like liens, foreclosures, arrests, and body attachments would be barred for medical debts.
- No lawsuit or similar action could occur until at least 180 days after the first bill, and a 30-day notice would be required before initiating such actions.
- Interest on medical debt judgments issued after January 1, 2026, would be capped at three percent.
- Expanded exemptions would shield certain assets, including a portion of disposable earnings, child support income, vehicles, and up to five thousand dollars held in accounts.
- Healthcare facilities and providers would be prohibited from denying medically necessary care solely due to unpaid medical debt and would be required to publicly disclose their collection policies.
