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Creates new federal rules that limit how hospitals collect medical bills and sets up a government-funded program to let a nonprofit buy and forgive medical debt. Hospitals that participate in Medicare must adopt and publish financial-assistance policies, screen patients for eligibility, delay collections while eligibility is decided, include clear notices on bills, and face limits on liens, wage garnishment, interest, and sale/assignment of medical debt. The Department of Health and Human Services will run audits, a secure reporting portal, and can impose civil penalties for violations. Also establishes a Medical Debt Relief Grant Program to fund one eligible nonprofit to identify, purchase, and discharge qualifying medical debt (eligibility based on debt size or household income) and authorizes $100 million for FY2027 to be used for that purpose.
The bill reduces medical‑debt harms and increases relief and transparency for low‑ and moderate‑income Americans, but shifts costs and compliance burdens onto hospitals and taxpayers in ways that could raise prices, strain providers (especially rural hospitals), and leave some eligible people unserved or exposed to privacy risk.
Low-income and uninsured individuals (primarily ≤250% FPL) will face fewer aggressive collection actions and reduced financial burden because hospitals cannot place liens, foreclose, garnish wages for qualifying medical debt and cannot charge interest or sell/assign that debt.
Medically indebted people up to 400% of the poverty line (including some middle‑income households) will have eligible medical debts acquired and discharged through a federal grant program, lowering out‑of‑pocket liabilities and improving credit profiles.
Patients (especially low‑income, uninsured, and those with chronic conditions) will receive clearer, earlier billing and charity‑care information and get eligibility determinations at least 30 days before payment is due, with appeals available—reducing wrongful or premature collections.
Hospitals (particularly smaller and rural systems) will face higher administrative and financial burdens—due to expanded screening, appeals, reporting, caps on repayment, and limits on selling debt—which may be passed to patients through higher prices, reduced services, or could threaten hospital financial viability.
Smaller or rural hospitals risk losing Medicare participation for noncompliance, which could cause revenue loss or closures and reduce local access to care in affected communities.
Taxpayers will bear direct federal costs (including a $100 million grant pool) and indirect costs for HHS oversight (portal, audits, enforcement), increasing federal spending or crowding out other priorities.
Introduced February 10, 2026 by Gabriel Vasquez · Last progress February 10, 2026