Michigan Senate Passes Bipartisan Package to Address Medical Debt and Require Hospital Financial Assistance Programs

LANSING — The Michigan Senate approved a comprehensive package of medical debt legislation Wednesday, with bipartisan support from Democrats and Republicans. The five bills aim to reform how hospitals collect unpaid medical bills and require facilities to create financial assistance programs for low-income patients.

The legislation, championed by Sen. Sarah Anthony (D-Lansing) and Sen. Jonathan Lindsey (R-Coldwater), received unanimous approval from the Senate Health Policy Committee and the full Senate. The bills now move to the House of Representatives for consideration.

Key Provisions of the Medical Debt Package

The Senate package includes several measures designed to protect Michiganders from the growing burden of medical debt:

Collection Restrictions

Under Senate Bills 701 and 702, large healthcare facilities and medical debt collectors would be prohibited from taking several aggressive collection actions, including:

  • Arrests for unpaid medical debt
  • Wage garnishments
  • Property foreclosures
  • License plate camera enforcement

The bills also limit how facilities can charge interest and late fees. Large healthcare facilities and medical debt buyers cannot charge interest or late fees that exceed 3% of the outstanding debt per year. Additionally, late fees and interest cannot be charged within 90 days after the final invoice is due.

Credit Reporting Ban

The legislation prohibits consumer reporting agencies from including medical debt information in credit reports. This would prevent unpaid medical bills from affecting a person's credit score, according to estimates that show over 700,000 Michiganders struggled with medical debt last year.

Medical creditors and debt collectors would also be barred from communicating with or reporting any information to consumer reporting agencies regarding a person's medical debt.

Hospital Financial Assistance Requirements

Three additional bills address hospital financial assistance programs:

SB 449 requires hospitals to develop, implement and publicly post information about financial assistance programs based on patients' incomes. The bill, approved 33-2, would mandate that facilities create assistance programs offering up to 100% discounts for uninsured patients whose annual income is at or below 350% of federal poverty guidelines.

Hospitals would need to:

  • Post information about financial assistance programs on bills, invoices and their websites
  • Submit annual reports to the Michigan Department of Health and Human Services detailing the number of applications and benefits provided
  • Create a process to check patient income eligibility

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

SB 451, approved 27-8, prohibits consumer reporting agencies from creating reports containing medical debt information. This bill would further protect patients from having their medical bills appear on credit reports.

Governor's Endorsement

Governor Gretchen Whitmer called for medical debt reforms during her final State of the State address in February. The governor urged the Legislature to work with her office on similar reforms before she leaves office at the end of the year.

"Being sick or getting hurt shouldn't also mean going broke," Whitmer said in her February 25 address.

House Speaker's Response

House Speaker Matt Hall (R-Richland Twp) did not commit to supporting the Senate legislation during a press conference Wednesday. While Hall acknowledged liking the issue, he stated it was incomplete and expressed interest in other medical cost measures.

"I like this issue, but it's incomplete," Hall said. He indicated House Republicans also want to see hospital price transparency legislation and the renewal of Michigan's participation in the Interstate Medical Licensure Compact, which would otherwise jeopardize the licensure of 8,000 practicing doctors across the state.

Industry Response

The Michigan Health and Hospital Association did not take an expressed position on the bills, stating it is willing to work with lawmakers on new policies.

"Ensuring patients have access to high-quality hospital care in their communities is deeply important to Michigan hospitals, and we look forward to continued collaboration with all stakeholders to find solutions that preserve vital services close to home," association spokesperson Elise Gonzales said.

National Context

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.

Credit Industry Pushback

The bills received pushback during the committee process from the credit reporting industry. In a letter to the Senate Health Policy Committee, Consumer Data Industry Association director Zachary Taylor stated the bills could conflict with federal law.

"Maintaining alignment between state consumer reporting laws and federal consumer reporting laws is more critical than ever," Taylor wrote. "State legislation that attempts to regulate credit reporting can unleash many unintended consequences."

Next Steps

The legislation now proceeds to the House of Representatives, where Speaker Hall has indicated interest in the issue but wants to see additional measures addressed alongside the Senate bills.

Sen. Anthony emphasized that the Senate bills represent a starting point for concrete proposals that meet the needs of Michiganders.

"What people like to see is when we have concrete proposals that meet the needs of the people and I think this bill package before us does that," Anthony said.

Sen. Lindsey added that the work is not done without also passing hospital price transparency bills.

"We have an opportunity to not only address medical costs when they become a crisis for people, when they face medical debt. But to also help them in getting care in ways that are the most economically feasible for those people," Lindsey said.

Impact on Michigan Residents

With estimates showing that over half a million Michiganders face medical debt, the Senate's action represents a significant step toward addressing a growing financial burden that can affect even those with health insurance. The bills received bipartisan support, including unanimous votes from the Senate Health Policy Committee and the full Senate, signaling broad agreement on the need for medical debt reform.

The legislation now awaits action by the House of Representatives before it can become law.

Sources

  • Michigan Senate OKs medical debt plan to cap interest, limit collections - Bridge Michigan - https://bridgemi.com/michigan-government/michigan-senate-oks-medical-debt-plan-to-cap-interest-limit-collections/
  • Michigan Senate passes medical debt bills - Michigan Public - https://www.michiganpublic.org/health/2026-03-12/michigan-senate-passes-medical-debt-bills
  • Medical Debt Legislation Clears Senate, MHA-Supported Bills Advance in the House - Michigan Health and Hospital Association - https://www.mha.org/newsroom/medical-debt-legislation-clears-senate-mha-supported-bills-advance-in-the-house/
  • Healthcare Bills Advance in Michigan Legislature - Michigan Health and Hospital Association - https://www.mha.org/newsroom/healthcare-bills-advance-in-michigan-legislature/