A proposal to significantly reduce the interest rate applied to medical debt in Washington state stalled in the House of Representatives before the legislative session concluded on March 12. The measure, Senate Bill 5993, was one of several bills considered in recent years as lawmakers continue to examine the impact of medical debt on consumers and the broader healthcare system.
SB 5993 aimed to lower the interest rate on medical debt to 1%, a substantial decrease from the current 9% cap established under state law in 2019. Earlier versions of the bill proposed eliminating interest on medical debt entirely, initially setting the rate at 0%. Supporters of the legislation argued that reducing interest would help prevent medical bills from growing more burdensome for patients who are already struggling to pay healthcare expenses.
In February, the Washington Senate passed the bill by a 29–19 vote along party lines. Before advancing the legislation, senators adopted an amendment designed to limit the retroactive application of interest on existing medical debt balances.
Although the bill cleared the Senate, it did not receive a vote in the Washington House before the legislative deadline, effectively halting its progress for the year. As a result, lawmakers are expected to revisit the proposal during a future legislative session, with discussions likely continuing during the interim period.
The debate surrounding SB 5993 reflects ongoing legislative interest in medical debt policy in Washington. In recent years, state lawmakers have repeatedly introduced and advanced measures addressing medical debt collection practices, interest rates, and garnishment rules. These efforts are part of a broader policy trend aimed at limiting the financial impact of healthcare-related debt on consumers.
However, proposals to cap or eliminate interest on medical debt have also prompted discussions about potential downstream effects. Critics have raised concerns that significant reductions in allowable interest rates could alter how medical debt is serviced or managed, potentially affecting healthcare providers, billing operations, and the broader financial ecosystem surrounding medical services.
While SB 5993 did not advance this year, the issue remains active in Washington policymaking. Observers expect that lawmakers will continue examining how medical debt policies balance consumer protections with the operational realities faced by healthcare providers and entities involved in managing unpaid medical accounts.
Additional Medical Debt Legislation
SB 5993 was not the only medical debt-related proposal considered during the session. Senate Bill 6105, which would increase the amount of earnings exempt from garnishment for judgments arising from medical debt, was also considered by the legislature. The bill received a public hearing but was ultimately tabled for the year. Like SB 5993, it is expected to be reconsidered in a future legislative session.
Meanwhile, another measure related to consumer debt litigation has advanced to the governor’s desk. Senate Bill 5720 establishes a Uniform Consumer Debt Default Judgments Act and has been delivered to Governor Bob Ferguson for approval. The bill passed the Washington Senate unanimously, 47–0, and cleared the House with a 93–1 vote.
According to a legislative summary, Washington enacted consumer protections related to debt buyers in 2020. SB 5720 seeks to expand on those protections by applying certain requirements to all holders of purchased debt and their affiliates, rather than limiting the provisions solely to debt buyers.
The legislation also introduces new disclosure requirements in actions to collect consumer debt and establishes remedies in cases where those requirements are not satisfied.
If signed into law, SB 5720 will take effect on January 1, 2027.
Author: Jennifer Evancic
Jennifer.Evancic@ResourceManagement.com
Jennifer Evancic is a third-party auditor valued by creditors and large organizations for her knowledge in call monitoring within the collections industry. With meticulous attention to detail and a firm grasp of regulatory requirements, she ensures compliance with clients’ criteria and state and federal regulations.
Jennifer audits collections calls, ensuring they meet client-specific criteria and comply with regulations, providing valuable insights and maintaining industry standards.
Beyond her auditing responsibilities, Jennifer takes the lead in organizing and facilitating monthly call calibrations. These sessions serve as a collaborative forum where clients and their vendors come together to discuss call monitoring results and address any findings or areas for improvement. Jennifer’s guidance fosters open communication and ensures alignment between clients and vendors, driving continuous improvement in collections practices.
Jennifer stays up-to-date with compliance and industry best practices by participating regularly in peer meetings, regulatory updates and industry webinars. This keeps her informed about emerging issues and ensures she remains a knowledgeable leader in collections compliance.
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