A medical debt collection bill has been introduced in the Washington legislature that aims to enhance consumer protections and eliminate interest charges on new and unpaid medical debt incurred in the state, a move that could significantly alter how medical balances are serviced, collected, and enforced.
The proposal, Senate Bill 5993, was introduced by Sen. Emily Alvarado and received its first public hearing before the Senate Law and Justice Committee earlier this week. The bill would prohibit creditors and collectors from charging or collecting interest on new or unpaid medical debt going forward, building on Washington’s 2019 law that capped such interest at 9%.
Supporters framed the measure as a response to ongoing affordability pressures and the long-term financial impact medical debt can have on households. Testimony highlighted situations where patients facing serious or chronic illnesses accumulated substantial balances that continued to grow due to interest, even years after treatment. Advocates argued that eliminating interest would make repayment more manageable without absolving consumers of their underlying obligations.
If enacted, Washington would join states such as Maine and Delaware that already prohibit interest on medical debt. Lawmakers also pointed to other states that have reduced allowable interest rates to low single digits, signaling a broader trend toward limiting the downstream financial consequences of medical care.
Opposition testimony focused on the potential operational and financial impact on healthcare providers, particularly smaller and rural hospitals. Industry representatives warned that interest on medical debt functions similarly to a loan mechanism, allowing providers to extend time for repayment while offsetting the cost of delayed reimbursement. Removing that tool, they argued, could result in unintended consequences, including cost shifting or higher charges elsewhere in the healthcare system.
From a collections and legal perspective, the bill goes beyond interest limitations. It also shortens enforcement timelines for judgments that include medical debt, limiting the period during which execution or garnishment may occur and restricting the ability to extend such judgments beyond six years. These provisions would require agencies, law firms, and debt buyers operating in Washington to reassess recovery strategies, valuation models, and compliance processes for medical portfolios.
The proposal is scheduled for a possible committee vote later this week. If approved by the Legislature and signed by the governor, the law would take effect 90 days after the legislative session concludes.
