Medical Debt Reforms and Hospital Financial Assistance Bills Move Forward in Michigan Legislature

LANSING — A bipartisan package of healthcare legislation addressing medical debt, hospital financial assistance, and liability protections has advanced through Michigan Legislature committees, with several bills now moving to the full chambers for consideration.

The legislation represents one of the most significant healthcare policy pushes of the 2026 session, building on calls from Governor Gretchen Whitmer during her final State of the State address in February to reform how medical debt affects Michiganders.

Senate Approves Medical Debt Package

The Michigan Senate unanimously approved two bills on March 4, Senate Bills 701 and 702, which together aim to fundamentally change how medical debt is collected and managed in the state.

Under the legislation, large healthcare facilities and medical debt collectors would be prohibited from arresting, garnishing wages, or foreclosing on property to recoup unpaid medical bills. The bills also establish strict limits on interest and late fees, preventing healthcare facilities or medical debt buyers from charging more than 3% of the medical debt amount per year.

Additionally, the legislation would ban deferring, denying, or requiring patients to fully pay medical debt before receiving urgent care services — ensuring that access to emergency treatment cannot be blocked by financial concerns.

The bills would also require healthcare facilities to refund patients within 60 days if those patients had paid more than was owed after financial assistance was applied. This provision aims to prevent overcharging and ensure that financial assistance programs work as intended.

Hospital Financial Assistance Act

The Senate also approved three additional bills creating a new Hospital Financial Assistance Act:

SB 449 passed 33-2 and would require hospitals to develop, implement, and publish information about financial assistance programs based on patients' incomes starting in 2027. The bill would mandate that hospitals submit annual reports to the Michigan Department of Health and Human Services detailing the number of applications and benefits provided by their financial assistance programs. Non-compliance could result in fines and fees.

Under SB 449, hospitals would be required to provide up to a 100% discount for uninsured patients whose annual income is at or below 350% of federal poverty guidelines. The financial assistance program would also apply to patients who owe the hospital an unpaid bill greater than 30% of their annual income.

SB 450, also passed 33-2, would clarify the authority of hospital boards of trustees in determining patient eligibility for financial assistance under the Hospital Financial Assistance Act.

SB 451, which passed 27-8, would prohibit consumer reporting agencies from including medical debt information in consumer credit reports. The bill would also bar medical creditors and debt collectors from communicating with or reporting any information about medical debt to consumer reporting agencies.

House Takes Additional Healthcare Bills

The Michigan House of Representatives also acted on several healthcare-related bills during the week of March 9, including legislation on premises liability, opioid treatment programs, and third-party litigation funding.

HB 4582, sponsored by Rep. Jerry Neyer (R-Shepherd), passed the full House 58-48 and now moves to the Senate for consideration. The bill would restore Michigan's "open and obvious" doctrine in premises liability cases, returning to the standard that property owners generally do not have a duty to protect against hazards that are clearly visible.

The legislation responds to recent Supreme Court rulings that changed the doctrine from a complete legal defense to merely one factor in liability cases. Rep. Neyer stated that the court's changes have increased legal uncertainty, pushed more cases into lengthy litigation, and driven up insurance costs for businesses and property owners across the state.

The bill also includes protections preventing individuals injured while committing crimes such as breaking and entering from suing property owners.

SB 398, sponsored by Sen. Joe Bellino (R-Monroe), modifies opioid treatment program requirements under the Department of Licensing and Regulatory Affairs. The House Health Policy Committee previously supported the legislation, and the Behavioral Health Integration Council engaged with bill sponsors during review.

HB 5281, sponsored by Rep. Mike Harris (R-Waterford Township), would regulate third-party litigation funding transactions and require transparency measures. The Michigan Health and Hospital Association supports the legislation.

Organ Donation Incentives

The Senate Health Policy Committee unanimously approved SB 301 on March 4, sponsored by Sen. Joe Bellino (R-Monroe). The legislation would provide a tax credit to employers whose employees take time off to serve as living organ donors. The bill now proceeds to the full Senate for consideration.

The House Health Policy Committee took testimony on HB 4832, sponsored by Rep. Dave Prestin (R-Cedar River), which would create a state licensure process for anesthesiologist assistants to address healthcare workforce shortages. The Michigan Health and Hospital Association supports the legislation.

Legislative Context

Governor Whitmer called for medical debt reforms during her final State of the State address in February, stating that "being sick or getting hurt shouldn't also mean going broke." Nationally, medical debt affects more than 100 million Americans who owe a combined $220 billion, according to a 2024 memorandum from the U.S. Consumer Financial Protection Bureau. State officials estimated around 700,000 Michiganders struggle with medical debt as of last year.

The Michigan Health and Hospital Association has been actively engaged with legislators on these issues, securing several key amendments to the medical debt legislation and continuing to advocate for improvements in healthcare affordability.

All five bills approved by the Senate on March 4 now move to the House for further review and consideration, where they await action from Speaker Matt Hall.

What's Next

The full Senate package of medical debt and hospital financial assistance legislation represents a comprehensive approach to addressing a problem that affects hundreds of thousands of Michiganders. The bills combine immediate protections against aggressive collection practices with longer-term structural reforms to ensure hospitals provide financial assistance to those who need it.

As the legislation moves through the legislative process, lawmakers will need to balance the interests of healthcare providers, patients, and consumers while addressing the complex policy challenges posed by medical debt and healthcare affordability.

Sources:

  • Michigan Health and Hospital Association, "Medical Debt Legislation Clears Senate, MHA-Supported Bills Advance in the House" — https://mha.org/newsroom/medical-debt-legislation-clears-senate-mha-supported-bills-advance-in-the-house
  • Bridge Michigan, "Michigan Senate OKs medical debt plan to cap interest, limit collections" — https://bridgemi.com/michigan-government/michigan-senate-oks-medical-debt-plan-to-cap-interest-limit-collections
  • MI House Republicans, "Rep. Neyer bill restoring clarity to Michigan premises liability law passes House" — https://gophouse.org/posts/rep-neyer-bill-restoring-clarity-to-michigan-premises-liability-law-passes-house