On January 24, 2025, Washington State introduced Senate Bill 5480, aimed at reforming consumer protection laws related to hospital debt and consumer reporting. The bill seeks to address the challenges faced by individuals burdened with medical debt, ensuring they are informed of their rights and options for charity care before any collection efforts begin.

One of the key provisions of Senate Bill 5480 mandates that hospitals must include a notice with the first written communication to debtors, informing them of potential eligibility for charity care. This notice must also provide contact information for the hospital, allowing individuals to seek assistance. Additionally, the bill prohibits the collection of hospital debt while an application for charity care is pending, provided the hospital has been notified of the application or appeal status.

The bill also proposes amendments to existing consumer reporting laws, specifically regarding the reporting of medical debt. Under the new provisions, medical debt would not be reported if it is more than seven years old, aligning with the treatment of other types of adverse information. This change aims to alleviate the long-term financial impact of medical debt on consumers' credit reports.

Senate Bill 5480 has sparked discussions among lawmakers and advocacy groups. Supporters argue that the bill is a necessary step toward protecting vulnerable consumers from aggressive debt collection practices and ensuring they are aware of available resources. Critics, however, express concerns about the potential impact on hospitals' revenue cycles and the feasibility of implementing these requirements.

The implications of this bill are significant, as it addresses the growing issue of medical debt in the United States, which has been linked to financial instability for many families. By enhancing consumer protections, the legislation could lead to improved financial outcomes for individuals facing medical expenses, while also prompting hospitals to adopt more transparent practices.

As the bill moves through the legislative process, its future will depend on ongoing discussions and potential amendments. If passed, Senate Bill 5480 could set a precedent for similar reforms in other states, reflecting a broader movement toward consumer protection in healthcare financing.