A group of lawmakers earlier this month reintroduced the Patient Debt Relief Act, proposing new federal protections for consumers facing medical debt, including limits on wage garnishment and home foreclosures, new repayment requirements for hospitals, and a grant program to purchase and retire qualifying medical debt. The bill, led by Rep. Gabe Vasquez [D-N.M.] and joined by Rep. Angie Craig [D-Minn.] and more than a dozen co-sponsors, comes as lawmakers point to rising medical costs and coverage changes that are pushing more consumers into collections.
Rep. Vasquez previously introduced this measure back in 2024.
What the bill would do: The Patient Debt Relief Act would create a federal framework aimed at curbing certain medical debt collection practices and expanding relief options for financially distressed patients. Key provisions include:
- Establishing an HHS grant program allowing nonprofits to purchase medical debt for individuals whose medical debt exceeds 5% of adjusted gross income or whose household income is below 400% of the federal poverty level.
- Requiring hospitals to offer affordable repayment options before referring accounts to third-party collectors.
- Prohibiting hospitals and collection agencies from foreclosing on homes or garnishing wages to collect medical debt.
- Mandating annual audits by HHS to assess hospital compliance with the new requirements.
Why this matters: If enacted, the proposal would introduce national restrictions on enforcement tools traditionally used in medical debt recovery, including wage garnishment and liens. It would also impose new pre-collection obligations on hospitals that could affect placement volumes, timing of account transfers, and documentation requirements for agencies and debt buyers working medical portfolios.
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