Vermont introduces bill prohibiting sale of medical debt by large health care facilities
January 28, 2025 | Introduced, House, 2025 Bills, Vermont Legislation Bills, Vermont
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The Vermont State Legislature has introduced House Bill 112, aimed at reforming the handling of medical debt in the state. Proposed on January 28, 2025, the bill seeks to prohibit large healthcare facilities from selling medical debt and restricts the reporting of such debts to credit agencies.
The key provisions of House Bill 112 include a ban on the sale of medical debt by large healthcare facilities, with an exception allowing for the transfer of debt to tax-exempt organizations under Section 501(c)(3) of the Internal Revenue Code. These organizations would be permitted to cancel the debts of patients, thereby alleviating financial burdens for those affected. Additionally, the bill prohibits both healthcare facilities and medical debt collectors from reporting medical debt to credit reporting agencies, which could help protect patients' credit scores from the negative impacts of medical debt.
The introduction of this bill has sparked discussions among lawmakers and healthcare advocates. Proponents argue that the legislation addresses the growing issue of medical debt, which has become a significant financial strain for many families. They emphasize the importance of protecting patients from the long-term consequences of unpaid medical bills, which can lead to financial instability and hinder access to necessary healthcare services.
Opposition to the bill has emerged from some healthcare industry representatives who express concerns about the potential financial implications for healthcare facilities. They argue that the inability to sell medical debt could impact the revenue streams of these institutions, potentially leading to higher costs for patients in the long run.
The economic implications of House Bill 112 could be substantial. By preventing the sale and reporting of medical debt, the bill aims to reduce the financial stress on patients, which may lead to improved health outcomes and increased access to care. However, the potential impact on healthcare facilities' finances remains a point of contention.
As the bill moves forward, its significance lies in its potential to reshape the landscape of medical debt in Vermont. If passed, House Bill 112 will take effect on July 1, 2025, marking a significant step toward addressing the challenges posed by medical debt and its effects on individuals and families across the state.
The key provisions of House Bill 112 include a ban on the sale of medical debt by large healthcare facilities, with an exception allowing for the transfer of debt to tax-exempt organizations under Section 501(c)(3) of the Internal Revenue Code. These organizations would be permitted to cancel the debts of patients, thereby alleviating financial burdens for those affected. Additionally, the bill prohibits both healthcare facilities and medical debt collectors from reporting medical debt to credit reporting agencies, which could help protect patients' credit scores from the negative impacts of medical debt.
The introduction of this bill has sparked discussions among lawmakers and healthcare advocates. Proponents argue that the legislation addresses the growing issue of medical debt, which has become a significant financial strain for many families. They emphasize the importance of protecting patients from the long-term consequences of unpaid medical bills, which can lead to financial instability and hinder access to necessary healthcare services.
Opposition to the bill has emerged from some healthcare industry representatives who express concerns about the potential financial implications for healthcare facilities. They argue that the inability to sell medical debt could impact the revenue streams of these institutions, potentially leading to higher costs for patients in the long run.
The economic implications of House Bill 112 could be substantial. By preventing the sale and reporting of medical debt, the bill aims to reduce the financial stress on patients, which may lead to improved health outcomes and increased access to care. However, the potential impact on healthcare facilities' finances remains a point of contention.
As the bill moves forward, its significance lies in its potential to reshape the landscape of medical debt in Vermont. If passed, House Bill 112 will take effect on July 1, 2025, marking a significant step toward addressing the challenges posed by medical debt and its effects on individuals and families across the state.
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