RELATING TO MEDICAL DEBT.

2025 Regular Session Introduced by Troy Hashimoto and 2 co-sponsors

SB 1040 aims to forgive medical debt and regulate collection practices, easing financial burdens for individuals and families struggling with high medical costs.

Reported from HLT (Stand. Com. Rep. No. 1254) as amended in HD 1, recommending passage on Second Reading and referral to CPC.

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Purpose and Intent

SB 1040 aims to address the growing issue of medical debt in the state. The bill seeks to implement measures for the acquisition and forgiveness of medical debt, thereby alleviating financial burdens on individuals and families affected by high medical costs. The intent is to create a more equitable healthcare system by providing relief to those struggling with medical bills.

Key Provisions

Medical Debt Forgiveness: The bill proposes mechanisms for the forgiveness of certain medical debts, potentially reducing the financial strain on individuals who are unable to pay their medical bills.

Acquisition Regulations: It establishes guidelines for how medical debt can be acquired and managed by collection agencies, ensuring that consumers are treated fairly and transparently.

Reporting Requirements: The bill mandates the collection of data on medical debt, which will be used to inform future policy decisions and studies regarding healthcare affordability.

Study and Reporting: A requirement for a comprehensive study on the impact of medical debt on residents will be included, with findings reported to the legislature to guide further legislative action.

Affected Parties

Consumers: Individuals and families burdened by medical debt will benefit from potential debt forgiveness and improved regulations on debt collection practices.

Healthcare Providers: Hospitals and medical facilities may experience changes in how they handle unpaid bills and collections, impacting their revenue cycles.

Collection Agencies: Agencies involved in the acquisition of medical debt will need to comply with new regulations, which may alter their operational practices.

Legislative Timeline and Procedural Aspects

Introduced: January 17, 2025

First Reading: January 21, 2025

Committee Hearings: The bill has undergone several committee reviews, including HHS/CPN and WAM, with recommendations for amendments.

Amendments: The bill has been amended multiple times throughout the legislative process, with the most recent version being HD 1, which was reported from the HLT committee on March 14, 2025.

Current Status: As of March 14, 2025, the bill has passed Second Reading and is referred to the Committee on Consumer Protection and Commerce (CPC) for further consideration.

Conclusion

SB 1040 represents a significant step towards addressing the challenges posed by medical debt. By implementing measures for debt forgiveness and establishing fair practices for debt acquisition, the bill aims to improve the financial well-being of individuals facing medical expenses. The ongoing legislative process will determine the final form and impact of this important legislation.

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