Michigan lawmakers are moving forward with a series of bipartisan bills that would significantly change how medical debt is collected, reported, and managed throughout the state. The legislative packages would establish new requirements for medical debt collection practices, limit credit reporting of medical debt, and create uniform hospital financial assistance programs.
The proposed reforms follow a call from Michigan Governor Gretchen Whitmer during her 2026 State of the State address to address the impact of medical debt on residents. Whitmer urged lawmakers to consider measures such as capping interest rates on medical debt, preventing medical debt from appearing on consumer credit reports, prohibiting certain debt recovery actions, and requiring hospitals to offer financial assistance programs.
At the same time, the state is partnering with Undue Medical Debt on initiatives aimed at reducing medical debt burdens for Michigan residents, according to a press release from the governor’s office.
Senate Legislative PackageÂ
A package of bills led by State Sens. Jonathan Lindsey and Sarah Anthony includes Senate Bills 449, 450, 451, 701, and 702. Among the proposed changes, the legislation would cap annual interest rates on medical debt at 3%.Â
Senate Bill 702 would establish the Medical Debt Protection Act, while Senate Bill 701 would amend the Michigan Consumer Protection Act to classify violations of the Medical Debt Protection Act as unfair trade practices.Â
In addition to limiting interest rates, the legislation would introduce several requirements related to medical debt collection. These include restrictions on certain collection activities, requirements for advance notice to patients, disclosure of financial assistance options, and conditions governing the sale of medical debt to third parties.Â
The Senate-approved package also prohibits credit reporting agencies from including medical debt information on consumer credit reports.Â
Senate Bills 701 and 702 are tie-barred, meaning neither bill would take effect unless both are enacted into law.Â
Additional Protections and Hospital RequirementsÂ
The Senate legislation works alongside House Bills 5254 and 5255, which are currently being reviewed by the House Committee on Health Policy. Together, the measures would prohibit wage garnishments, property liens, and home foreclosures related to medical debt for patients who qualify for financial assistance.Â
Separate legislation, House Bills 6071 through 6073, would require Michigan hospitals to implement standardized, income-based financial assistance programs. The proposals would establish patient discounts based on objective income thresholds and require annual reporting to the state to monitor compliance.Â
Next StepsÂ
Following committee consideration, the Senate package and companion House bills sponsored by Reps. Kathy Schmaltz, Steve Frisbie, Karl Bohnak, Angela Rigas, and Laurie Pohutsky are expected to move to the House floor for consideration by the full chamber.Â
If enacted, the legislation would introduce new requirements affecting hospitals, debt collectors, credit reporting agencies, financial institutions, and compliance professionals involved in medical debt recovery and reporting. Stakeholders across these industries will likely continue monitoring the bills as they progress through the legislative process.Â
Author:Â 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.
